The Federal Trade Commission says you should stay away from credit repair firms and manage your own credit repair. However, the FTC acknowledges that ethical credit repair firms can help you improve your credit report.
Misconceptions
The FTC says none of the credit repair firms has a magic formula for improving your credit. According to the FTC, companies are lying when they say they can remove quickly remove bankruptcies, foreclosures, liens and other negative entries from your credit report.
Benefits
The credit repair bureaus can help by pointing out errors that can be removed from your credit report. A credit repair firm can write letters challenging any of the information on your report. However, the FTC says you can do all of this yourself and save the hundreds of dollars in fees charged by some credit repair firms.
Alternatives
Paying your bills on time is the best way to start cleaning up your credit, according to the FTC. For specific help on credit repair, consider meeting with a non-profit credit counselor such as those affiliated with Consumer Credit Counseling Service. Or take a financial literacy class at a local community college or from a non-profit credit agency.
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