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How does credit repair work?

  • Guy said i don't really know if i been with a legit credit repair or not, but please let me know if any of you guy here have the same experience. Said i agreed to sign up with this one local credit repair company that offer to remove as much negative as they can from my credit report. They charge me up to $4xx.00 for fees now it was about 2 month past and almost 3 if it the end of December. I have a total of 6 collection agency that was reported on my credit history, and each of them has a different amount i owed. Let said, Collection (A) i owed $95 (B) $65 (C) $156 (D) $99 (E) $103 (F) $205 I was told that they will try to removed&resettled the debt, but must I must have cash on the spot which is they can negotiate and get the bill to lower. For example maybe 65% off each creditor and than after the payment has been confirmed, they will have the credit bureau delete it off my credit report. Well, if that is the case, it doesn't make sense if i can just call the creditor and negotiate with them on a resettle plan without have to pay $4xx.00 to the credit repair company + all the money that i will have to pay after the credit repair company negotiated with the creditor. Let said all collection A-F add up to $620 and they were able to get it low to $400. I think i be better just negotiate with the collection agency and pay off with the money i been charge for membership fees with the credit repair company. Any advices here?

  • Answer:

    Credit repair. That's a can of worms to try to talk about in a short answer. The bottom line: there is no legitimate way to remove accurate information from a credit report. The credit repair companies promise that their program is "perfectly legal". And that's true. The credit repair company will use "perfectly legal" means to remove bad items from your report. Here's the problem: after the credit repair company is done, you know that your credit report is now inaccurate. If you try to obtain credit from someone who relies on your cleaned-up credit report, you are committing fraud. You are knowingly giving false information to a lender. You are intending that the lender rely on that false information when making a decision to make a loan. That's fraud. Now you've taken a simple loan transaction and made a big mess that could result in all kinds of bad stuff, including criminal prosecution. And, hey, you paid the credit repair company good money for the privilege. What a Deal . . . for them. I agree with your last statement. You would be better off negotiating with your creditors and using the money you would be charged for membership fees to help pay down your debt. ________

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Credit repair companies do an excellent job of separating you from your money. There is nothing they can do to remove legitimate negatives on your credit report. You would do much better to use the funds to negotiate settlements with the collection agencies. You can probably settle for 25% to 50% in a lump sum, depending on how old the default. Just be sure to get any settlement agreement in writing before you pay and do not give the collector direct access to your bank account. By the way, paying off derogatory items on your credit report will not improve your score nor get the item removed. The damage is done and will remain for the balance of the 7 year reporting period, whether paid, settled, or unpaid.

bdancer222

You're paying THEM a lot of money to do what YOU can do for free, and neither they nor you, will necessarily be successful. By law, you can dispute a negative credit remark in your record by sending a letter to the credit agency requiring the company to validate the debt. If the company does not respond in 30 days, the agency will remove the remark which would then raise your score a little bit. Most companies DO respond, with verifiable validation of your debt. So it stays. As for paying off an old debt, no, it does NOT disappear from your report. It's marked as satisfied, but it's still a poor debt. Credit reports have a number, either R for Revolving or I for Installment, from 1-9. 1 is as good as it gets, 9 means it was written off an uncollected, the worst. If you satisfy a bad debt, then it won't be a 9, but it will still be a 5 or worse. Not good and STILL on your record. You'll notice that every credit repair company, in the fine print, offers NO guarantee of repaired credit, just that it will use every bit of its expertise to attempt it. Big deal. You pay for success or failure, mostly failure. Might as well use the money to keep your score from sinking any lower, by dealing with paying it off. For people that have too much debt that they just can't pay off, there is bankruptcy. It sinks your credit score into the bucket, but it's not permanent. You can slowly build it back up again, just like starting out as a young adult. And these credit counseling (not credit repair) companies that they urge you to use first? They're paid for by the creditor companies all over the country, plus YOU pay them even more, for you to pay off the debts you owe, only more slowly, and your credit score STILL goes into the bucket.

percival.sweetwater

Although credit repair companies are doing nothing illegal, they cannot actually do anything that you cannot do yourself. They prosper because of the number of the people too lazy to sort out their own problems or else are seeking an easy solution to their problems. Collection agencies themselves only prosper because so many people lack the common sense to contact the creditor immediately there is a problem. If this is done, the creditor realizes you are an honest straightforward person and will work with you. Those who ignore the creditor and simply sit back and allow the problem to get worse are logically regarded as people hoping to evade their debt

Ed Fox

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