The truth about credit repair.

What is credit repair?

With a positive title like “credit repair,” it’s no wonder that people fall prey to the fraudulent practices of credit repair companies. They promise to “fix your credit” by disputing negative items on your credit report. They say they can get any item off your report, but only real inaccuracies can be removed permanently—and you can do that yourself for free. Credit repair companies make sure you know when these items are removed, but don’t tell you when they show up again.

These companies offer a seemingly simple solution to credit debt that’s appealing in a few ways.

• It seems easy and immediate.
• It appears to be permanent.
• You don’t have to do much work.

Unfortunately, none of those promises are true. Credit repair companies offer to “fix your credit” by removing negative items from your credit report. They offer to file disputes on negative items on your behalf with the credit bureaus and get them removed. The problem with this approach? The entire strategy is based on exploiting a loophole in the credit system. When accurate items are removed, it’s only temporary—a few months at best.

Why credit repair doesn’t work.

Credit bureaus are bound by federal law to respond to every disputed item within 30 days. And if they don’t respond, the disputed information must be removed from the credit report. Credit repair companies file lots of disputes and wait for the credit bureaus to miss a deadline.

When that happens, the credit repair company jumps to action, calling the consumer to announce the item was removed and suggesting the consumer pay more each month to “keep up the momentum and go after the rest.”

The other problem? If the item was accurate; if it was removed solely because the bureau missed the deadline, it will simply reappear on your credit report within 2-3 months. That’s because any creditor can, by law, re-verify an accurate item, at any time, and get it back on to the credit report. And if there’s a debt they’re trying to collect, they will.

Even worse? If there are any real errors, you can dispute them on your own. For free. Learn how to do that here.

What you need to know.

The credit repair companies will:

• Exploit a loophole that that only offers temporary relief.
• Do something you can do for yourself for free.
• Charge you up to $100 a month for their service.

There are ways to improve your credit that last. Working Credit can helps people establish and build their credit by providing the lifelong knowledge and tools they need to reach your financial goals.