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The Truth About Credit Repair Products and Services

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Since the onset of the subprime mortgage crisis and "credit crunch" in early 2007 the credit repair industry has been experiencing explosive growth. Consumers with low credit scores are now finding it very difficult to buy homes or refinance their existing mortgages. By most accounts, about 20-30% of consumers have "less than perfect" credit. With this large percentage of the population unable to get financing people are desperately looking for help.

Is credit repair the answer? Put simply, sometimes. Often times, however, people are quite disappointed to find that after spending money on such services they see little improvement in their credit score. A credit repair service can be very useful when you have mistakes on your credit report or derogatory items that should not be there. The credit repair company will write letters to the credit bureaus and contest these mistakes in order to get them removed. These letter writing campaigns can result in significant improvements in your credit score within a relatively short period of time. Any positive results that are going to be achieved by credit repair can typically be accomplished within 4 to 5 months. However, if you do not have any mistakes on your credit report such as derogatory items that rightfully should not be there - a credit repair service will not be able to raise your score. If your credit score is low because of late payments, judgments, liens or charge-offs you will not likely see any benefit from paying for credit repair.

For useful information on how to raise your credit score yourself for free, you should check out myFICO.com. This website is operated by Fair Isaac and Co. - they are the company that created the FICO score that is currently used by 90% of financial institutions worldwide (source - www.myfico.com). On this site you can also get assistance in writing letters to the credit bureaus on your own. The 3 major credit bureau companies in the U.S. are Experian, Equifax and TransUnion.

Curious how your credit score stacks up?*

  • 700+ = excellent credit
  • 640-699 = good credit
  • 575-639 = fair credit
  • <575 = poor credit

*source - Credit.com