If there is one financial service that has come to acquire a negative meaning in the US it is credit repair counseling. The blame for this rests squarely on credit repair counselors who have misled clients and abused the faith that their clients vested in them.
The general refrain is that if you can repair your credit on your own then you should do so. Don’t visit a credit repair counselor because you may end up sharing personal information that may be misused later.
You must realize that most credit repair counselors do little to improve your credit rating. In fact, what most offer is debt reduction. This is entirely different to improving your credit rating. In fact your credit rating may go down if your counselor does not submit the repayments on time, which you faithfully hand over to him every month. Your credit score will carry more “30 days late” notations than when you were handling the repayments yourself.
Some credit repair companies even go to the extent of mailing letters to credit bureaus stating that the information on their records is wrong. They demand that this information be removed from the report till a proper investigation is done. The credit bureaus, in full faith, remove the negative notations and wait for the actual report to come. The credit repair companies post the “clean” report to their clients, claiming that their credit standing has improved. It is another matter that all the negative notations return once the investigations are over.
However, this does not mean that every credit repair agency is a scam. There are some agencies that are honest, and have made their name the hard way. These agencies can be trusted to get those items removed from your credit report that are actually incorrect. These items include double listings, children's items on parents' reports, and paid-off items that still show past dues.
But this is the most that any credit repair agency can do. You must know that no organization can erase negative information from your credit report if the information happens to be correct. The information stays on your record for seven years from the time it is reported. The bankruptcy information stays even longer – ten years.
It is always best to handle the issues related with your credit yourself. This way you don’t provide personal information to a third party, and also know what your actual credit standing is.