People often worry about their credit records and the way that they affect their ability to raise finance. Many companies claim that they can clean up a record and help the individual improve their score and rating. Can credit repair companies actually do all they claim? Is it worth paying for these services or should the individual take a DIY approach?
What do Credit Repair Companies Claim to Do?
The claims made by these companies may vary but most will market the fact that they can clean up and repair a credit record. Some of these services may simply offer a basic set of solutions. Others may go as far as to claim that they can remove serious legal black-spots such as CCJs.
Why do People Use Credit Repair Services?
Consumers often understand the concept of bad credit and the impact it can have on their lives. Many know that they have a less than perfect record. But many don’t know how to remedy problems if they have them. They will, therefore, opt to pay a company to sort out their situation simply because it seems to offer them a quick and easy solution.
The costs involved here often seem worthwhile. Issues such as bankruptcy and CCJs cause significant problems when it comes to getting approval for future financial products. Paying to have these kinds of problems solved, if it were to help take out new mortgages, loans and credit cards, may seem like a good deal.
What Can a Credit Repair Company Actually Do?
Despite their claims some credit repair services cannot deliver on their promises. Serious issues such as CCJs simply cannot necessarily be removed by third parties. A County Court Judgment is automatically lodged on a credit record for six years in the UK. It can only be removed if it is paid within one calendar month of its registered date and this should happen automatically. Even if it is paid in full after this time it will sit on a record (although it will be marked as satisfied) for this six year period.
Many less than reputable companies will take a fee from a consumer to investigate their situation and then tell them that they cannot help them after all. There are, however, some reputable businesses operating in this field that can take a look at a record and walk its owner through the repair process if applicable. But, this may be a process that the individual can take on for themselves at no cost.
Can People Repair Their Own Credit Records?
Most problems on credit records that can be repaired are down to mistakes, out of date information and incomplete data. It is relatively easy for any consumer to request to see a copy of their record from the referencing agencies, some of whom offer a free credit check. Once they have this they can then go about cleaning up what can be repaired.
If it turns out that the record cannot be repaired or cleaned up then the consumer may want to look at building better credit in the future. This may not immediately undo any damage that has been done but could have a positive effect for the future.
Carol Finch - Carol Finch is the Topic Editor for Retirement Planning, Budgeting, E-Commerce & Technical/Business Writing on Suite101.
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