Credit Repair Agencies
There are many credit repair agencies and credit counseling
services out there, which will offer to fix your credit
for a fee or reduce your payments. Some of them make
outrageous and false claims, and there is nothing they
do that you can’t do for yourself. Credit repair
agencies often work by getting your credit report and
disputing every single item on it.
If the creditor does not provide evidence that the
entry is correct within 30 days, then the item must
be removed. But there’s a catch, the item can
be added back in later if the creditor re-submits it,
so disputing a legitimate item may result in getting
that item off your record, but it is likely to be off
your record only for a short period of time.
Credit counseling services work in a variety of different
ways, but try to negotiate lower interest or settlement
payments with your creditors in order to lower your
bills. While making a settlement offer, such as paying
off a debt at a discount, may get a creditor off your
back, such a payment still results in points against
you on a credit report.
Though they may seem beneficial, credit counseling
agencies often charge hefty fees, and may not be all
that effective. Some of these agencies are non-profit;
but be aware that this status does not make them any
more effective or legitimate than any other counseling
service. Also, the fact that you are using a credit
counselor is noted in our credit report, and it is not
always look upon as a positive thing by a lender.
The notation “under debt management” is
entered on your report and stays there until all debts
under the program have been paid off, and most mortgage
lenders, even subprime lenders, will stay away when
they see that notation.
Yes, there are many credit repair agencies and counseling
services available. However, it’s better to find
one locally, where you can physically go into an office
and have a face-to-face conversation with somebody and
explain your situation.