Don't Use a Credit Repair Clinic
Steer clear of credit repair clinics -- you can repair your credit yourself.
If you want to clean up your credit file, steer clear of credit repair clinics. These companies claim they can fix your credit, qualify you for a loan, or get you a credit card. But you shouldn't have to pay for these services: These companies can legally do only what you can easily do yourself. And some of them use questionable tactics that can land you in hot water.
Some Credit Repair Clinics Use Illegal Tactics
Some credit repair clinics use practices that are fraudulent, deceptive, and even illegal. For example, credit repair clinics have been caught:
- stealing the credit files or Social Security numbers of people who are under 18 or have died, and substituting these for the files of people with poor credit histories, and
- advising clients to create a new identity by applying for an IRS Employer Identification number (EIN), a nine-digit number that resembles a Social Security number, and using it instead of their Social Security number to apply for credit -- which is illegal.
You Can Repair Your Credit For Free
 | Can I add my good payment history on a private loan to my credit report? |  |
Even if a credit repair company is legitimate, it can't do anything for you that you can't do yourself. What the company will do, however, is charge you between $250 and $5,000 for their unnecessary services.
What Credit Repair Companies Claim to Do
Here's what credit repair companies claim they can do -- and how to do it yourself:
Remove incorrect information from your credit file. You can do that yourself under the Fair Credit Reporting Act. For more information, see How to Clean Up Your Credit Report.
Remove correct, but negative, information from your credit file. Negative items in your credit file can legally stay there for seven years or more (depending on the type of information), as long as they are correct. No one can wave a wand and make them go away.
One credit repair clinic tactic is to challenge every item in a credit file -- negative, positive, or neutral -- with the hope of overwhelming the credit bureau into removing information without verifying it. However, credit bureaus often dismiss these challenges on the ground that they are frivolous, a right that credit bureaus have under the Fair Credit Reporting Act. You are better off getting your file and selectively challenging the items that are incomplete or inaccurate.
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