For this topic we define "credit repair" as the removal of derogatory trade-lines from the three major credit bureaus: Experian, TransUnion and Equifax.
Research indicates that credit repair does work under certain circumstances*. There is however much controversy on the subject of the effectiveness of credit repair. Our inquiry into this matter divulged the following:
The Federal Trade Commission, state attorney generals, consumer protection groups and other regulatory agencies generally warn consumers against using credit repair companies. All three credit reporting bureaus adamantly profess that credit repair is ineffective. Conversely, credit repair companies, attorneys and publishers of how-to books who claim to be able to help individuals repair damaged credit spend millions of dollars advertising their credit repair services.
Despite all the warnings against credit repair and claims that it never works, legislation was passed to specifically deal with the business of credit repair and, seemingly, grants the industry legitimacy: Credit Repair Organizations Act (CRO).
Our findings indicate that credit repair is effective and credit repair companies cannot perform any unique activities that an individual can perform on their own. Credit repair therefore is a service, not a secret, or special ability except in situations where lawsuits are filed against creditors or credit reporting bureaus for failure to comply with regulations and in the case of re-scoring for home loan and mortgage refinance approval.
