The Ugly Truth About "Credit Repair"
What the credit repair industry doesn't want you to know...
When you use a credit repair company you are simply paying that company to send out dispute letters on every negative item on your report. You are NOT paying to have the items deleted! Typically, every 45 days they send out the same dispute letters to each of the three national credit reporting bureaus. So what's their strategy? The credit repair company will tell you that, by law, the credit bureaus have to remove negative items from your report within 30 days if the information is not verified by the creditor. While this is true, what they do not tell you is that many creditors may take 45, 60, or 90 or more days to verify information. When they ultimately verify the information, the item you thought was gone forever is slapped right back on your report. This cycle of taking items off and having them put back on is what credit "repair" is all about. This method used to work before the bureaus and creditors weren't able to handle the high volume of verification requests. But that was many years ago. The bureaus and creditors are well aware of this method now and have the manpower to handle these request with ease. If you are using a credit repair you are WASTING YOUR MONEY!
How could credit repair be hurting your scores?
Credit repair, ironically, could be the very reason your scores are not as high as they could be. Not every derogatory item on your report is always factored in by the credit scoring models. If you attempt to dispute such an item you will suddenly bring that item to the attention of the scoring models, effectively "re-awakening" that item from the dead. When this happens it re-impacts your score in a negative way, and your scores drop even LOWER than they were before!
Should I trust the credit advice provided by the major credit bureaus?
Before you go soaking up every piece of advice from the credit bureaus about how to manage and improve your credit, you would be wise to consider the following. The credit bureaus' largest client is the creditors. Creditors are the companies that extend credit to the public based on credit scores. Did you know the lower your credit scores are the more money the creditor makes? Your lower scores are the justification the creditor depends on to charge higher interest rates and thereby increase their profit margin. So the LOWER the bureaus can keep your score, the HIGHER the profits their biggest client, the creditors, can make! It's a win-win situation for them, but bad news for consumer with less than perfect credit.
