Credit History Repair Services

When you have less than great credit, you may feel tempted to hire a company that offers to repair your credit history for a fee. Some of these firms even claim they can remove bankruptcies from your credit history. While some credit repair companies offer a legitimate service, others are out to squeeze fees out of your wallet. You can choose to repair a credit history yourself, but a debt repair specialist may save you time and money.

What They Do

Credit history repair services that abide by the law can only perform services that consumers can do themselves for free, according to the Federal Trade Commission. This is usually limited to disputing errors on a report and filling out the necessary paperwork, such as letters to the credit bureaus. The only other legal service they can provide is to offer advice, such as suggesting the right mix of loans.

What They Should Not Offer

No credit history repair service should offer a 100 percent guarantee to remove any and all negative items on your report. If you file for bankruptcy, for example, you must wait 10 years for this to fall off your report -- there are no tricks to removing a bankruptcy before the 10-year limit. A common fraudulent tactic is to advise the consumer to use a fake Social Security number. Suggesting or pursuing illegal tactics could land you or the credit repair service in jail.

Benefits

Even though credit repair services offer to perform actions you can do for free, you might benefit from this service if you have several errors on your report. It takes the typical consumer four hours to dispute a mistake on their report, according to Bankrate. Credit repair companies could add an air of professionalism to your dispute and eliminate the stress of fighting the credit bureaus.

Tips

If you decide to go with a credit repair company, do not hire a company that demands payment upfront. The FTC declared upfront payments to credit services illegal in 2008. Nonprofit credit counselors, such as those affiliated with the Consumer Credit Counseling Service, will help you clean up a credit report for free.

Also, be aware that you can add a personal statement to any negative item, which the lenders might weigh in any credit application.