Can A Credit Repair Agency Help You?

Can A Credit Repair Agency Help You?

202px-credit-cardsCredit card offers typically overrun the mailboxes of millions of American consumers. These offers usually make it incredibly easy for those with moderate or even poor credit to obtain a credit card. Sadly, in many cases, poor consumer habits result in maxed out credit card debt and even collection on past due accounts. What can be done to help pay off debt and repair one’s credit score?

Enter the era of credit repair specialty companies. These debt relief businesses offer consumers with credit issues a means to help eliminate debt, clear up credit issues with the three major credit reporting agencies, and start building a good credit history. However, with any industry filled with desperate consumers begging for help, there are good services, bad services, and the ugly services.

The Good Credit Repair Services

A good credit repair service will offer to work with a consumer to reduce debt and clear up a credit report. The first step of debt relief is to take all credit cards from the consumer and destroy them. This prevents any further charging on an unaffordable budget.

The next step is to work out a payment plan with the credit card companies and other creditors to pay off all debt. A good credit repair service will negotiate lower interest and even convince the lender to waive interest in some cases. This will help you make affordable payments to actually reduce your debt. Each month you pay the credit repair service, and they in turn pay your creditors. The service takes a reasonable fee each month for their debt relief efforts out of your payment.

Once the debt is being paid, and ultimately eliminated, through regular payment plans, the credit repair service will ensure that your positive efforts are shown on your credit reports. Once a collection or debt is satisfied, the creditor should report the good news to each of the reporting agencies. However, the lenders don’t always report your good standing, and this can have a continued bad effect on one’s credit score. However, with the repair agency’s help, these reports are updated on a regular basis so that your credit score reflects the most current information.

These credit repair services can help a person manage overwhelming debt with an affordable payment plan. They will also work to ensure that the good results are reflected on your credit report. However, the downside is that a consumer does need to destroy credit cards and essentially close their credit accounts to enter a reasonable payment plan. Ultimately, it will be up to the consumer to continue good credit practices and try to re-acquire credit.

The Bad and Ugly Repair Services

Unfortunately, there are unscrupulous credit repair services that do not fulfill their promises to help a consumer. On the uglier side, there are agencies that make ridiculous promises that are completely untrue, including their ability to remove liens, bankruptcies, and judgments from a report forever. These scammers make 100% guarantees, even stating that they can provide you with a new ‘legal’ identity. Companies who make such outrageous promises are usually not out to help the consumer, but rather take advantage of desperate people by taking their money and reneging on promises to help with credit issues.

If you are looking for help in solving your credit problems, research a repair service carefully. Check with the Better Business Bureau to ensure the company is in good standing. With a good repair agency by your side, you can pay off debt and start over on a healthier credit report.

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