When Should You Use a Credit Repair Agency?

When Should You Use A Credit Repair Agency
Mike Randall
By: Mike Randall
Updated: July 24, 2014
Experts share their tips and advice on BadCredit.org, with the goal of helping subprime consumers. Our articles follow strict editorial guidelines.

You may have read previous articles from me in which I’ve been critical of credit repair agencies and their sometimes shady tactics.

I’ve also said not all of them should be avoided, but most of the people who use them could do the same work themselves and save a bunch of money.

That being said, there are times when it pays to use a credit repair agency – as long as it’s a reputable one that is highly rated by the Better Business Bureau.

Credit repair agencies specialize in talking with your creditors. They have knowledge of the rules and responsibilities of creditors within the framework of the law. They also have tactics that can be effective in convincing a creditor to be more lenient.

However, there are limits to what a credit repair agency can do, regardless of what they promise you.

Here are some things to be aware of:

1. Inaccurate information.

The only information that can legally be removed from your credit report is information that is inaccurate or that does not actually belong to you.

If a credit repair agency tells you they can clean up your credit by removing damaging entries like bankruptcies, judgments or liens, they are misleading you.

2. Your legal rights.

Credit repair agencies are required to tell you your legal rights, including the right to submit a dispute or extenuating explanation that will be entered into your credit report.

This is something that many credit repair services will charge you for – and sometimes they charge a lot!

“Credit repair agencies can be effective in

repairing certain entries on your credit report.”

3. Illegal activity.

Some credit repair agencies may advise you to do things that are actually illegal.

These include disputing credit entries that are true, using a different form of ID like an employer identification number (EIN) or acting on your behalf without the proper authorization.

4. All credit repair agencies will charge a fee.

And there is nothing wrong with that. However, most of them will not tell you that you can do the same things they do – only you can do it for free.

This is when it pays to know your rights under the Fair Credit Reporting Act (FCRA).

Credit repair agencies can be effective in repairing certain entries on your credit report. A good credit repair agency will help you quickly identify those events on your report that are most damaging and will help you address them.

For someone who does not feel comfortable dealing with creditors directly or with reviewing their credit report and filing a dispute, a credit repair agency may be the way to go.

Just be sure to do your research and only deal with a company that has excellent credentials and an impeccable reputation.

Photo source: creditrepairnotes.com.