Credit reair companies

So-called "credit repair" companies place ads in magazines, newspapers and on the Internet claiming that they can remove negative information from credit reports. The ads usually carry a version of this message: "Turned down because of bad credit? We can help!" These companies call themselves "Credit Advisors," "Credit Rating Correction Services" or "Credit Consultants." Many of these companies charge hundreds if not thousands of dollars to "clean up" bad credit reports. But the truth is, these companies can only do what you could do yourself—at no charge.

Nobody can remove negative information that is accurate from your credit report. No company has a "secret" ability to remove negative information.

But this doesn't stop these companies' claims. This deceptive quote is from a credit repair company brochure: "Charged-off accounts, collection accounts, judgments, tax liens, repossessions, and even bankruptcies can be removed from your credit records in less than one year (five to seven month average)."

One tactic is to bombard credit reporting agencies with requests to verify information. If a credit reporting agency cannot verify an entry within 60 days, it will remove the information from the report. But if the information is later verified to be accurate, it will go back in the report.

Before you even consider signing a contract with a company that promises to repair your credit, remember these facts:

* You may obtain a copy of your credit report on your own.
* You have the right to dispute entries in your credit report.

In any case, credit repair companies are prohibited under federal law from collecting any payment from you until after you get an amended copy of your credit report.

Never pay money to get your credit repaired. You can do it yourself for very little cost.