Does Credit Repair Make Sense?

 Does Credit Repair Make Sense? by Howard Lipset, CPAby Leslie H. Tayne, Esq.

Founder and managing director of Tayne Law Group, P.C., one of the few New York State financial law firms dedicated to debt resolution and bankruptcy alternatives.  

An award winning financial attorney, Leslie is a regularly sought out guest speaker and media expert who offers valuable insight, advice and strategies relating to various areas of debt.

As defined by the Federal Credit Repair Organizations Act, credit repair companies/organizations help consumers remove negative information from their credit report. Credit repair organizations usually achieve this by sending dispute letters to credit reporting agencies to challenge the credibility of negative information reported on someone’s credit report by one of the three major credit bureaus (Experian, Transunion and Equifax).  If you have legitimate errors on your credit report, those errors can affect your credit and you might benefit from a credit report company correcting them.

While credit repair companies can help consumers eliminate negative information from their credit report, consumers need to be careful when looking to work with one of these companies.

If you are considering a credit repair company to help amend your credit report, there are few things you should keep in mind before choosing a company. This way you can insure the company you choose to work with is a legitimate business and not a scam.

  • Be aware that credit repair companies can’t charge their customers until after services have been rendered; if they ask for upfront fees it should be a red flag that it may be a scam.
  • Credit repair companies can’t promise to remove negative credit information.
  • A credit repair company also can’t guarantee that your bankruptcy will be deleted from your credit report, otherwise they are violating federal law.
  • In addition, note that it is a violation of federal law if they don’t inform you that you can dispute information on your credit report for free on your own.

If you are seeking the services of a credit repair company, be aware of the terms and conditions that they outline for you upon your initial contact with them. If the company is truthful about their services and is in compliance with Federal and State law, then there’s a good chance the company may be able to help you repair your credit report. The credit repair company may even become an advocate on your behalf when working with lenders during a time when you are looking for a loan. If a lender is willing to work with a credit repair agency, the agency may be able to raise your credit score. Do some online research though before working any such company.

If you are very concerned about your credit and are looking for a way to repair it BUT have no inaccurate information on your credit report, consider going to the root of the problem and trying to resolve some of your debt. Paying down your debt, by making on time monthly payments to all your creditors and avoiding accruing more debt, is the best way to naturally improve your credit score.

Howard Lipset, CPAHoward Lipset, CPA
Progressive Management, Inc.
(516) 883-2962

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