You Don't Need Credit Repair
Also: The Consumer Bureau is doing its job quite well
Maybe your credit score isn’t what you want it to be. You may have a bad debt or an account in collections because of a past mistake.
You want credit — say to buy a car or even a home — but you know that your score could be an impediment.
Landlords often check credit before deciding to rent, so you know even this transaction can be problematic if your score is not “where it should be.”
Then, you see an ad for a credit repair company. They offer to help you negotiate with the credit bureaus and improve your score — sometimes even offering a certain points boost as possible with their services.
Do NOT be deceived.
First, almost everything a credit repair company offers to do for you, you can do yourself.
You can challenge bad or illegitimate debt with letters to the credit bureaus.
You can settle with creditors and get debts in collection removed — yes, a settlement goes on your record, but once you pay, your delinquency ends and you can move forward with time.
You can ask any creditors for debt validation letters. If they can’t produce these, you can ask the bureaus to remove the debts/claims.
You can monitor your credit report for FREE and flag any unrecognized accounts/claims.
Sure, this is a bit of work. But, it’s all free.
A credit repair company can’t make time go faster.
The number one way to improve your credit score is time. The longer the time between your last delinquency and now, the better your score will be.
The more months of consistent, on-time payments of existing accounts, the better your score will be.
This takes time.
A recent story about two prominent credit repair businesses highlights the problems inherent in using these companies.
Namely: They charge you a bunch of money and fail to deliver results.
In a motion in federal court, the CFPB asked for more than $2.7 billion in redress for consumers who paid for Lexington Law’s credit repair services, more than $366.7 million for consumers who paid for CreditRepair.com’s credit repair services, and a combined penalty of nearly $53 million.
“Between March 8, 2016 and March 31, 2023, defendants took approximately $3.1 billion from more than four million consumers in violation of the Telemarketing Sales Rule,” the CFPB said. “The time has come for defendants to return that money to the consumers they unlawfully charged, cease their illegal billing practices, and pay penalties for their misconduct.”
The bottom line: You don’t need credit repair unless you just have some money you want to throw away each month.
