We see warnings everyday about credit repair being a scam and that is impossible to repair credit: outnumbered only by credit repair companies claiming to be able to repair credit for $39.00 per month. There seems to be three major factions generating different information and there is so much information about this subject that it is difficult to decipher exactly what happened. What we did discover at least sheds some light on the issue of the controversy surrounding credit repair companies.
It appears that in the late 70's, early 80's, techniques of credit repair were published. Legend has it that a senior member of TRW (now Experian) divulged inefficiencies in credit bureau operations that made it possible to remove derogatory items which launched the credit repair business.
Individuals with knowledge of these techniques charged large sums to consumers desperate for the promise of good credit. Unfortunately the claims made by these credit repair companies were overbroad and though derogatory information was removed, the affect was temporary. The derogatory trade lines removed from the credit bureau history were eventually re-reported by the creditors. In those days reporting occurred 4 times yearly so it was sometime before consumers, who thought their credit history was permanently cleared of derogatory information, discovered the credit "repair" had no permanent effect.
Complaints and requests for refunds became so abundant that many credit repair companies closed, leaving consumers with no recourse but to seek intervention from state and Federal regulators. These regulators launched information campaigns to protect consumers against unscrupulous credit repair companies.
Legislation was enacted creating guidelines for credit repair organizations, legitimizing the industry. Unfortunately the vast majority of companies offering credit repair do not meet these guidelines and consumers must still beware.
However the credit repair industry is growing up and legitimate credit repair services can be had for almost nothing. Most we looked into have a start-up fee of around $100.00 and a monthly fee of $39.00. Compared to the time required for a consumer to learn and perform these services themselves, it may be money well spent. The key, as in any service, is to use a legitimate company that meets Federal Guidelines.
