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Is It True That Credit Repair Companies Are Scams-How To Choose A Credit Repair Company

Updated on August 13, 2008

Is It True That Credit Repair Companies Are Scams

Repairing peoples credit is a huge business and business is booming for credit repair companies especially in todays world. While many people feel that all credit repair companies are scams just the opposite is true, when done right it can and does work.

If you need credit repair service you basically have two choices, you can hire a company to do it for you or you can do self credit repair. Due to time constraints many people choose to hire a company to do it for them.

If you choose to hire a company then the next step is making sure you hired an honest credit repair company and not a one thats out to rip you off. While this may sound hard there are a few things you can do help you decide and find the right company to fix your credit report.

1. Never choose the first company you talk to or visit, no matter how comfortable they make you feel or how much the claim they can do for you. Always talk to at least three companies before you decide.

2. Never under any circumstances pay for the services of a company that asks you for a large up front payment. This is a sure sign that something is not right and you should walk away. But be aware some legitimate companies may charge a small fee to set up you file. This should be no more the $50 and can often be negotiated for less or eliminated all together.

3. Be wary of credit repair companies that make outrageous claims like 24 hour credit repair or crazy guarantees. Instead you should be looking for a credit repair firm that quotes the average results they get. Many times when credit repair companies are scams they will try and impress and excite you with very outrageous claims, and many times they cannot back them up.

4. By federal law all companies who engage in credit repair must inform you that you can fix your credit score yourself. If for any reasons they avoid telling you this get up and walk away because this is a major sign of dishonesty.

5. Never sign a written contract that does not give you the right to cancel if yo are unsatisfied. Any legitimate company does not want to lock clients into something they do not want, but a company who wants to scam you will.

6. Under no circumstances ever use a credit repair service that asks you to set up a new credit file. this is a federal crime and very illegal. The trade name for this method of manipulating a credit file is file segregation. And if you are caught you will face severe penalties and possible jail time.

If you are having a hard time and keep finding credit repair companies that seem like they want to rip you off keep trying because there are legitimate companies out there that want to and will help you with your credit problems


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    • profile image

      captivereef 9 years ago from USA

      Do not forget to check out my self credit repair course at you get a free report for stopping by

    • OIFVETERAN profile image

      OIFVETERAN 9 years ago from Atlanta, GA

      As always good info!

    • profile image

      captivereef 9 years ago from USA

      sure go ahead and add it if you like

    • clem1952 profile image

      clem1952 9 years ago from St. Clair Shores

      I would Like your permission to add your site as a featured link on my help page, May I? please let me know. I agree with a lot of the information you offer here on your site thank you for the info, be careful many credit cards for bad crdit people will impose a setup fee as much as 75.00 and a monthly fee of 3.00 also a yearly one time fee of 50.00 and they add this all at one and you pay a minimum payment for about a year befor it get reduced to 0.00 and that's befor youuse the card for any new perchases. WOW.

    • CelinaMac profile image

      CelinaMac 9 years ago from Philippines

      Be careful. Scammers will tell you that you can remove anything from your credit report even if they are accurate.

      The FTC has repeatedly stated that it is illegal to mislead people into thinking that accurate and timely negative items can be legally removed from credit reports. Please check the Federal Trade Commission official website, so you will not lose money in scams.

      Moreover, credit repair companies cannot ask you for advance payment. They can only receive payments after they have fulfilled the service they committed to do for you. Please read the CREDIT REPAIR ORGANIZATION ACT. 

    • profile image

      captivereef 9 years ago from USA

      VEry true, while some companies are bad there are good companies out there. Also ask for past client references

    • profile image

      NewlyCleanedCredit 9 years ago

      Check out any repair company with the BBB first, and make your decision from there.