Credit repair companies’ false promises

When a company offers to fix your sloppy credit history, it’s often just a ploy to get your money.

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I got an email the other day from a young woman who was inquiring about companies that say they’ll improve a consumer’s credit rating. Was it true? Was it worth the money?

Jackie had been in to apply for a car loan at her bank and the lender had declined her loan. She was told only that she should check her credit bureau report. Something there was gumming up the works.

If you don’t already know, a credit bureau keeps records of how well consumers handle credit. When you sign a loan application form, you give your consent to the lender, be it a bank, credit card company and retail store, to access this information to decide whether or not you’re a good credit risk.

Your credit file contains a listing of debit and credit payments and it includes public record information about how promptly you’ve paid bills, along with all the yucky stuff like collections, judgments and bankruptcies.

You don’t have to be a late payer to be declined. A lender may refuse a loan application simply because the credit bureau’s records indicate that you have other loans outstanding. Yes, everything you owe shows up—including all those credit cards you have even if there are no balances outstanding. When credit is refused, you’re usually advised to have a look at your credit bureau report to see what’s amiss.

In Jackie’s case, someone else’s information was being recorded on her credit report. The other woman had a similar name and it was an honest mistake. All Jackie had to do was provide the credit bureau with proof of the error and her credit report was cleaned up.

So back to Jackie’s original questions: Could a credit-repair company clean up a mess and is it worth the money?

When a company offers to “fix” your sloppy credit history, it’s often just a ploy to get your money. And wouldn’t you rather spend that money paying down your debt, especially when it’s virtually impossible to cover up past mistakes. While ads for credit repair companies may seem like the cure for a credit life lived less than perfectly, in reality, no credit repairer has the power to change or erase accurate information in a consumer’s file.

If the reason you’re in trouble with a potential lender is because of wrong information on your credit file, you could pay someone to take care of the problem for you, but it’s often just as easy to take care of that problem yourself.

If you’ve damaged your credit rating by missing payments, carrying high balances or over extending yourself financially, you can improve your credit rating, but no one else can fix the problem for you. Time to make a budget, implement a debt repayment plan and get serious about how you manage your money.

You should check your credit files every six months to ensure the information is correct. Send a written request to one of the two major credit bureaus in Canada: Equifax Canada Inc. or Trans Union of Canada Inc. There is no charge for this service.

The longer you exhibit good credit behavior by paying your bills on time and managing your credit wisely, the more your credit rating will improve, until you once again achieve a favorable credit rating. And if you’ve got a good rating that’s been marred by inaccurate reporting, it’s your job to fix it. It’s your credit, after all.

6 comments on “Credit repair companies’ false promises

  1. It's worth noting that both Equifax and TransUnion have automated telephone systems for requesting your free consumer disclosure (credit report).

    Equifax's is 800-465-7166 and TransUnion's is 800-663-9980 and it's worth requesting both as different creditors pull one or the other file but usually not both and you should ensure both are accurate.

    You'll receive a much faster response using those systems versus mailing or faxing in information which has been known to be rejected for trivial reasons.

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  2. After your mortgage you shouldn't be borrowing money anyway.Take yourself off the grid,the term "my small house"used by Gail and David Chilton should tell you something.If you can't buy a 3 year old car with cash than take the bus.My wealthy friend told ,the no. 1 reason for his success is never having a car payment.Easy Peasy.

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  3. My credit report was littered with errors and I wasted days of my life trying to get a real person on the phone at Equifax only to finally chat with a useless 17 year old in an India Call center. Needless to say I ended up becoming a member of Canada Credit Fix. http://www.canadacreditfix.com

    Canada Credit Fix got the job done fast and they cleaned up all of the messes and helped me boost my credit score from 530 to 764 in only a matter of months. I must admit that I was skeptical at first but I can now state that the 12 month membership was worth every cent. I stay on the program now even though my credit is back to where it should be as they have a live credit monitoring program and they have a credit protection program. Also worth the fee if you want to avoid being a victim of identity theft!

    I would clearly recommend them to anyone with unresolved credit report issues.

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  4. Excellent post. Beware of Debt Settlement Companies. After US legislators cracked down on them, they started to prey on Canadians looking for a solution to their debt problems. Most just take your money in fees and do nothing for you. Always consult a trustee in bankruptcy if you have debt problems. An initial consultation is always free. We wrote a blog a couple of months ago on Debt Settlement Companies which can be found at
    http://www.irasmithinc.com/blog/when-you-have-deb

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  5. As a bankruptcy attorney for well over 12 years, I have seen it all when it comes to "easy" credit. Most of my clients who come to me, all have the same sad story about how easy the credit card or cards were to aquire, but the thought never occured to them, they would never pay them off at the minimum payment.

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  6. You are wrong. As i have done it myself and improved my credit score by 100 . Simply by questioning the inquries.

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