Do credit repair programs really work?

To many in the real estate industry, credit is the most important thing that you can have. For most people you can’t buy a house without credit. You pay higher interest rates with poor credit. You also pay more for other things like insurance and financing appliances with bad credit. So what do you do if you had some mistakes in your past and you need to fix your credit?

Many people are turning to professional credit repair programs. If you search on the internet for credit repair, a million different companies show up and they promise to do everything for you in order to repair your credit. Many people that are eager to buy a house often spend money on these programs in hopes that their credit will get high enough for them to take advantage of the current interest rates as well as to qualify to buy a home.

In my business I have looked into many of these programs and while some of these programs offer legitimate help for repairing your credit, none of them do anything that you can’t do for yourself. In fact, the information on how to repair your credit is freely available if you look on the internet. In my experience most people feel it is too much work or they are concerned that they might mess up and that is what prompts them to pay a professional.

So if you are going to pay a credit repair service, here are a few things that you should look at when making your decision.

First, don’t use a company that sells credit lines. Some companies say that they can add you to a credit line of someone else and that will almost immediately boost your score. While this is true, about 2 years ago the credit bureaus adjusted their credit scoring and now when you are added to someone else’s credit cards it only has limited affects on your credit so tread with caution.

Second, a credit repair service is not a licensed service so look at the details. Credit repair companies many times are NOT licensed, so look at their information and ASK them what they are going to do. If they can’t clearly explain what they are doing for you then beware.

Finally, before hiring a credit repair agency, look at your own credit report. Look to see how old your credit items are. If they are over 7 years old then you may be able to remove them with just a phone call. Read up about it online and do a little research yourself before you spend that money.

Until next week…

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