This is a very difficult topic because credit repair service companies feel that they have been given a bad name and are nothing more than a scam, but from their perspective they believe that they give their customers the chance to have a fair chance at getting the better products and services that are out there for those who have the perfect credit score. The bottom line is those that have a great score have worked hard to get it to the point where it is. They have paid their bills on time, they have managed their credit responsibly and those that need help to repair their credit file haven’t managed it properly and they are going to benefit too, they are going to get the rates that should be reserved for those with better money management skills.
Understanding Credit Repair
If you want to understand what a credit repair service can do for you then you need to understand the basic concept of the industry. They work on your behave and they get information that is having a negative impact on your credit file removed. Once this is removed it will mean that you will have access to the better interest rates, the better products and you are less likely to be refused credit because of negative feed-back on your credit file.
How They Get Items Removed
One of the ways that the credit repair services works is it looks at your credit file and it contacts the creditors that have included a negative entry on to your report. The company then has 30 days with which they must respond and provide evidence that the negative comment is justified.
If the company fails to respond in the time limit then the item can justifiably be removed, if they prove the claim the credit repair services just starts the process from the beginning, eventually hoping that the company will give up or reply later than the required time scale and loses the battle for keeping the entry on the credit report.
How You Will Be Charged
It is possible to join a credit repair service and get one of three options for the payment method.
- You might agree to pay a set amount for each item the company successfully manages to remove from your credit file.
- You might be charged a one off fee that covers all the work that they are aiming to do for you.
- A monthly payment, they might agree with you that they will work with you for a period of time and during that time you pay them an agreed amount each and every month.
Does This Service Work?
There is a lot of evidence that this tactic does work and that many credit reports are improved by this service. But the negative connotations still exist, you are using the loop holes in the law that are there to protect you if there is an error on your credit file so that you have the chance to correct any mistakes that could affect your ability to get credit.
But what it is also doing is removing negative comments that are genuine, they have been put on the credit file for a reason and having them removed is giving your credit report the chance that it is wrong and if you then receive finance and are unable to afford or pay for this the company has been miss-lead about your past history. It has in essence been given false reports and has made a judgement on in accurate information.
One of the biggest disputes that people are having against the credit repair services is the false information that is being given out in the form of your credit file, it is no longer an accurate document and this can lead to wrong information being passed on. There is a counter claim that these companies in essence could be breaking the law, they are using tactics that are there to help people that have an error on their file and this is now being abused. It could lead to the total collapse of the credit file system and then everybody would be penalised if they want to obtain credit.
The cheaper option if you are looking for a way to improve your credit score in this under-hand way then there is no reason why you should pay a company good money when you can in effect do the job yourself for relatively cheaper out of pocket expenses. You would just continually harass your credit company for proof of their claim and they have 30 days with which to reply, if they are able to send the correct documentation within this time scale, you just start again until the time that they are late and then you have legitimate cause to have the comment removed from your credit file.