Is it worth going to a credit repair company?

If you are considering a credit repair agency or company, you are probably very stressed out from the financial challenges you have been through and you just want out.

Being in this situation causes us to make decisions quickly so we can get relief from the financial stress we are enduring.

Customer feedback as a Personal Banker

For the 7 years I worked as a Personal Banker, I honestly never heard of a good story come out of a credit repair agency. Most customers were shocked that they didn’t get what they were promised.

Here’s the deal. A credit repair company is going to have you pay them upfront fees. These fee’s are typically paying them to delete information from your credit report.

Is it legal to delete information from your credit report?

The short answer is no. Especially if the information is correct.

This violates the FCRA (Fair Credit Reporting Agency) accuracy requirement. Now, I am sure you don’t care about the FCRA! You just want to fix the situation you are in. I totally understand! But let’s go a little deeper.

Credit repair companies typically promise you a better credit score by making changes to your credit report. They promise they will fix it.

Now, you are probably thinking if you can pay to get out of this stressful financial situation, you are all in! It sounds great and is already relieving the financial stress from neck, back & shoulders.

You are imagining the stress being lifted and the pit in your stomach going away, sleeping through the night, and relief from the frustration that has built up over time.

When negative information is deleted, it’s like it was never there.

Can that help your credit score? Not usually.

This is not building credit. Yes, it’s removing some late payments or collection accounts. Keep in mind, the older these accounts get, the less impact they have on your credit score.

Misrepresent myself?!

Sometimes credit repair companies will ask you to misrepresent yourself to the credit bureaus by falsely claiming ID theft which is fraud with legal implications.

Just dispute all negative information?!

Other times they tell you to just dispute all the negative information – which is fraud also.

Can I get my money back?

If there’s one thing you can take away from this it is: that there is no recourse to get your money back from credit repair agencies. If you didn’t get a better credit score, your score is worse or they were unable to fulfill their promise, there is no recourse.

Should I stop making payments?

Always remember, if they tell you to stop making payments, this is going to have a negative effect on your credit report.

I highly recommend credit building and making a plan to reduce debt. This really depends on the financial challenges you are facing. There are no right or wrong answers. Only what works for you and your situation along with your goals.

I am living proof that you can get out of debt and stop living paycheck to paycheck. I did this as a single mom making near poverty wages!

The best way to build credit is to use it. Yes, use it regularly. The way I teach it is to put one thing on your credit card each month (if you can afford it) for about $5.00. This can be a membership to Netflix or buying a loaf of bread. Then when the statement is due, pay it in full.

If you don’t use credit, you are not building credit.