Although it may be tempting to believe a "quick-fix" scheme that promises to show you how to fix credit problems and raise credit score, the credit repair business and industry is full of false promises and scams. When you are in spiraling debt, it can be very tempting to believe someone if they offer you the chance to have your bad credit "erased." The truth is that this type of service is a scam.
A considerable number of these scams are initiated by email so be very wary if you receive email marketing about repairing your credit history. Some of the claims that credit repair companies have been known to make are also inaccurate: negative information can only be removed if is not correct. If it is true, then it will remain on your credit history for 7 years, or if you file bankruptcy it will remain on your history for 10 years.
Be clear about the type of organization you are talking to. There are not-for-profit companies as well as for-profit organizations. If you are dealing with a company that is charging you money, by law there are several things that they should do: explain your legal rights, provide you with a formal written contract, and allow you a "cooling-off" period of 3 days in which you can cancel the contract. Remember, if a for-profit credit repair company asks you for money before it's done what it promised to do, it is probably a scam.
If you thought that taking your money for nothing was bad enough, some companies will actively encourage you to commit fraud. They can do this in several ways: advising you to invent a new credit identity, telling you not to contact a credit bureau directly, or by recommending that you should dispute everything on your credit history.
Rather than wasting money on something that will worsen rather than help you raise credit score, find out first whether there's anything that you can do to help yourself. For a start, if information in your credit report has meant that you've recently been denied credit, you are entitled to ask for a free copy of your report. If not, you can easily obtain a copy by paying a small fee to one of the three main credit bureaus and, if possible, getting a report from each of them as the information they hold on people varies from bureau to bureau. Under Federal Law you are entitled to a copy of your credit report from each bureau once per year.
When it comes to bad credit help the not-for-profit organizations are generally a better choice than for-profit companies. There are some good for-profit companies but you must make sure you do your homework before deciding to sign a contract with them.
Can't pay your bills? Talk to a specialist bankruptcy attorney who will be able to discuss your options with you.