Hall Of Shame: Are Credit Repair Services A Hoax?

credit card debt coupleWe get asked all the time whether credit repair services are the real deal.

Can they truly fix your credit rating and lower your payments, or are they just one more ripoff scheme?

Consumer advocate and author Sid Kirchheimer says in his opinion these services deserve a big thumbs down.

“They may charge $5,000 or monthly fees of $100, but there’s nothing credit-repair services can legally do that you can’t do yourself for free or at low cost,” he writes in the latest AARP Bulletin.

His advice? If you do need debt consolidation or free or low-cost credit counseling, call the non-profit National Foundation for Credit Counseling at 800-388-2227. Check out their site for free consumer tips and calculators.

For more tips on avoiding financial scams, visit the AARP’s consumer protection site.

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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One Response to Hall Of Shame: Are Credit Repair Services A Hoax?

  1. Daniel Sater May 19, 2016 at 10:00 am #

    This article does a disservice to consumers. To make a broad brush stroke characterization of the credit repair industry leaves an inaccurate impression. As a person who advises and coaches credit repair companies, I know of hundreds of firms nationwide that are responsible, hard-working and effective at helping consumers solve their financial problems with their credit.

    The problem many times with writers on topics like this is that they have no first- hand knowledge of what they write about. They tend to rely on sources such as the credit bureaus that want to damage the reputation of legitimate credit repair companies have been extremely effective in helping to get the bureaus to correct, report accurately, or delete non-verifiable accounts on one’s credit report as required by law.

    These bureaus have been fined numerous times for not following the law and removing bad information or reporting accounts correctly. They have, according to the FTC, created an environment to discourage consumers from continuing to dispute inaccurate information listed on their credit reports.

    To say that Credit Repair Companies do nothing that the consumer can’t do themselves is a little naive. You can slaughter you own cow and cut up the meat just the way you want, but is that the best use of your time and will the results be anything like you will get from a butcher? Cheaper doesn’t mean better. Most Credit Repair Companies have the knowledge and training to recognize mistakes and bad reporting and understand what to do to achieve the results to show your credit report and scores in the best light.

    To join the National Association of Credit Service Organizations – (NACSO) the industry Trade Association, they must pass an exam showing their knowledge of consumer laws and the laws governing credit repair organizations before they are allowed to join. They also must show that they have a brick-and-mortar office to become members.

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