I saw this question posed on a forum by a woman who had a bad credit score and wanted to know if she should hire someone to repair it or if she should just contact her creditors herself. She also wanted to know how long she should wait after her credit report had been repaired before letting someone pull her report to see if she could “qualify for a house.”
Two fundamental errors
If you read this last paragraph carefully, you should have spotted two fundamental errors. First, despite what some Internet advertisers might want you to believe, there is no way to get credit repaired (more about this later). And second, since her credit report isn’t going to get repaired anytime soon, there is probably no way she would “qualify for a house”, i.e., get a mortgage.
Ethical credit repair
Bad credit reports can’t be repaired period. If there is negative information in your credit report that’s accurate, it cannot be removed and will stay there for seven years. Read the fine print in the ads for ethical credit repair companies and you’ll probably see that this is true. For example, if your search Google on the term “credit repair,” you’ll see a link to the website of Veracity Credit Consultants. Its page says“ Veracity works to remove errors, delete inaccurate negatives, and highlight good accounts. Notice how it says nothing about “repairing” or “deleting” accurate information.
What Veracity and other honest companies can do
As Veracity states, it and the other companies and attorneys you’ll find by searching on “credit repair” can get erroneous information removed from your report. If this information has negatively impacted your credit score, getting rid of it would definitely help both your score and your credit report. But again, remember there is nothing that can be done about accurate information.
Easy to get in, tough to get out of
The biggest problem with credit for many people is that debt is so much easier to get into than get out of. In fact, you can trash your credit in as few as three months by skipping payments and or by failing to make even your minimum monthly payments. Every expert I have read on personal finances has said that it’s critical to pay off your balances each month. Once you start carrying balances forward by making just the minimum monthly payments, you’re on a slippery slope. And if you start skipping those minimum payments, it’s certain that you’re on the way to big trouble.
Contacting her creditors
One thing this woman suggested that would make good sense is for her to contact her creditors as they might be willing to negotiate. This is especially true of credit card companies. They are staffed by hundreds of customer service agents who have been trained to be sensitive to their customers’ needs and to work with them. If this woman could show how she was in a serious financial bind, her credit card companies might be willing to give her a sort of recess of no payments for two or three months to work on her balances or they might suspend her interest charges for several months.
It might also be possible for this woman to negotiate settlements with her creditors for 50% of what she owes or even less. This could work if she has not made even her minimum monthly payments for six months or longer. However, she would have to be a very good negotiator and would have to have the cash available to pay the settlements.