Credit Repair Companies and Credit Counseling

Let's be crystal clear, right up front. Paying someone to "fix" your credit is a waste of your time and money, since the negative issues that are temporarily removed from your file will only reappear again in a couple of months.

Be careful with credit repair scams.

Most "credit repair" companies really don't help. In fact, you can improve your credit more effectively on your own. By using credit repair companies, you may also be opening yourself up to identity theft, unsolicited emails, and direct mailings. Protect yourself; don't ever share your personal information with strangers or give up your right to handle your own financial affairs as you see fit.

Another important point: credit counselors only promise to get you out of debt, not to improve your credit. Some companies will have you send them a check every month, out of which they're supposed to pay your creditors for you. However, some credit counselors will often pay your bills late, which means that your credit report soon becomes filled with "over 30 days late" notations and your credit score drops even lower than it was.

"Debt negotiators," posing as non-profit organizations, can ruin your credit even further, advising you not to pay your credit card bills at all. They also charge upfront fees, maintenance fees, and monthly fees, all of which are supposed to be placed in a "trust" account. Then, after many months have passed, debt negotiators finally convince creditors to settle for less money than was owed, making yours an "uncollectible account."

That tactic not only ruins your credit, due to the many "over 90 days late" remarks and collections notations, but all the money you supposedly saved -- which was actually money you owed -- will be considered as income by the IRS! In other words, if you owed $20,000 and settled for $12,000, you'd be required to list the $8,000 difference as income!

Credit repair companies promise to help clear up your credit problems. They write letters to credit bureaus, stating that various listed information is false, so the agencies will remove that information while they investigate your account. During that time, the credit repair company sends you a clean credit report, thereby giving you the false impression that you now have good credit. But after you've paid off the credit repair company, you'll discover that all the negative items will soon reappear on your report.

Remember: only incorrect items must be removed from your credit report if they're proven to be false. If the black marks on your credit report are correct, no one can have them removed, regardless of what credit repair companies may try to tell you. Working with collectors to remove negative remarks is possible, but that's another article.

Some credit repair agencies can probably do a reputable job removing items that are truly incorrect, such as: items after a bankruptcy that should have been removed, double items, children's items on parents' reports, and paid-off items that still show past due. Some people really just don't like dealing with this kind of thing, so a reputable credit restoration company can help with these problems.

If you're seeking legitimate financial help to buy a home, the best place to turn is to a mortgage broker. They're the ones who can offer you the best FREE advice for settling credit disputes and problems, so when you find yourself in difficulty, consider using a mortgage broker as your credit counselor.

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhouse fordollars.com/pages/5/index.htm

---

Credit Cards for Home Business

It is wise for you to have a company credit... Read More

Credit Report ? How Your Credit Score is Determined

Most consumers are aware that they have something known as... Read More

Credit Report ? Check Yours Regularly - and for Free

In the twenty-first century, there are few documents that have... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

How To Use Your Credit Cards Wisely

Are you one of the thousands pulling your hair out... Read More

Choosing The Credit Card That Is Right For You

Credit cards represent an important part of our financial lives.... Read More

UPS Delivers the Goods, Your Identity

Well now we add CitiGroup and UPS to the Identity... Read More

4 Steps You Can Take If Your Online Credit Card Application Has Been Refused

Help! I've Been Turned DownYou received an envelope in the... Read More

How Does a Creditor Determine Whether to Grant You Credit?

Credit 101How does a creditor determine whether to grant you... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time... Read More

What is a Credit Card?

A credit card allows you to buy things even though... Read More

Fight Credit Card Fraud with Common Sense

By now, you have undoubtedly heard of credit card fraud,... Read More

Is Your Credit Score Being Held Against You?

Credit Scores That HurtIs your credit score being held against... Read More

Free Credit Report - Really

2005 marks the year that consumers will be able to... Read More

Know Your Credit Card Rights

When you apply for a credit card, the application that... Read More

Free Credit Report ? Watch Out for Scams

Many people may still not be aware of an amendment... Read More

Finding Reputable Credit Card Companies

You're interested in getting the best credit cards for your... Read More

Useful Tips on Using Credit Cards

Here are some useful tips on using credit cards. Whether... Read More

Simple Identity Theft Protection

How many of you bank, shop, or transact other business... Read More

Online, Phone, U.S. Mail or In-Person: Where is Your Credit Card and Personal Identify Safest?

Identity theft is the fastest growing crime according to the... Read More

10 Ways of Reducing the Risk of Identity Theft

1- Check your credit report regularly2- Secure personal information in... Read More

ChexSystems: Who They Are and How it Affects You

ChexSystems is a company that maintains a subscriber membership service... Read More

How To Eliminate Credit Card Debt

There is almost nothing more troublesome than having too much... Read More

SuperCharged Secret 4, Credit Card Utopia

YOU SCRATCH MY BACK, AND I'LL BUY SOME MORE BEER!Let's... Read More

Top 5 Reasons To Check Your Credit Report Regularly

#1 Make sure mistakes aren't hurting your credit.Reviewing your credit... Read More

Using Credit Cards Wisely

"I think money was stolen from my card" or "I... Read More

Bad Credit? No Credit? Yeah, Its a Problem.

Many companies use the slogan "Bad Credit? No Credit? No... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Credit Counseling -- Why It Doesnt Work For Most Debtors

"Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More

What You Didnt Know About Your Credit Card Numbers

Have you ever really looked at your credit card and... Read More

Credit Repair Myths and Facts

There are no secrets to repairing your credit. Many shady... Read More

How to Deal with Hire Purchase Debt

WHAT IS HIRE PURCHASE/CONDITIONAL SALE?Although people often talk about "buying... Read More

Identity Theft ? Additional Protection for Soldiers on Active Duty

Congress passed the Fair Credit Reporting Act several years ago... Read More