Credit Repair Services...Can they help?

A guide to understanding the scam, the warning signs and the truth

Even the most normal, down-to-earth, everyday consumers can find themselves in credit card trouble, struggling with debt that becomes overwhelming, almost to the point of hopelessness. It seems that anything would be better than drowning their financial future in poor credit reports and a sea of credit card debt. If you're a consumer who feels frustrated, hopeless and at the end of your rope, read this before you decide to invest your money in a Credit Repair Service. You just might find that self help may be the only help you need… or want.

The Credit Repair Service scam

Credit Repair Services all over the world make hundreds of claims each day that they can "wipe out bad credit history" or  "change your life forever" by cleaning up your credit report. They make outrageous promises that seem too good to be true, and in fact, usually are. The unfortunate truth is that after you pay them hundreds, sometimes thousands, of dollars, most simply won't provide you with results. They'll disappear with your money, and you'll be left feeling even more upset and lost than before.

The Warning signs

A few very important things to look for if you're considering using a credit repair service to help clean up your poor credit:

Be cautious of a company that recommends that you not contact a credit reporting company directly.

Look out for a company that wants you to pay before they provide any credit repair services to you.

Beware of a company that doesn't tell you your legal rights and what you can do for yourself for free.

Be leery of companies that suggest inventing a 'new' credit identity -and a new credit report. They'll suggest applying for an Employer Identification Number to use instead of your Social Security Number.

Think twice about a company that advises you to dispute all information on your credit report, or that advises you to take any action that might seem illegal, like creating a new credit identity. If you end up doing something illegal and committing fraud, even though you were simply following the advice of a Credit Repair Service, you may be subject to prosecution.

Remember, you can be charged and prosecuted for breaking the law, even if it is the advice of a Credit Repair Service. It's a federal crime to misrepresent your Social Security number or to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses, no matter who advised you to do so.

The Truth About Credit Repair Services

Legally, no one can remove timely or negative information from your credit report if the information is accurate. You can do every single thing that a Credit Repair Service can legally do for you, except that you can do it for yourself at no cost. The Federal Trade Commission has a wealth of information on how to legally begin the process of cleaning up your credit history, without the help of a Credit Repair Service.

More information on credit repair