Steer Clear Of Credit Repair Clinics -- You Can Repair Your Credit Yourself

If you want to clean up your credit file, steer clear of credit repair clinics. These companies claim they can fix your credit, qualify you for a loan, or get you a credit card. But you shouldn't have to pay for these services: These companies can legally do only what you can easily do yourself. And some of them use questionable tactics that can land you in hot water. Some credit repair clinics use practices that are fraudulent, deceptive, and even illegal.

IRS Employer Identification number (EIN), a nine-digit number that resembles a Social Security number, and using it instead of their Social Security number to apply for credit -- which is illegal. Even if a credit repair company is legitimate, it can't do anything for you that you can't do yourself.

5,000 for their unnecessary services. Remove incorrect information from your credit file. You can do that yourself under the Fair Credit Reporting Act. For more information, see How to Clean Up Your Credit Report. Remove correct, but negative, information from your credit file. Negative items in your credit file can legally stay there for seven years or more (depending on the type of information), as long as they are correct. No one can wave a wand and make them go away.

One credit repair clinic tactic is to challenge every item in a credit file -- negative, positive, or neutral -- with the hope of overwhelming the credit bureau into removing information without verifying it. However, credit bureaus often dismiss these challenges on the ground that they are frivolous, a right that credit bureaus have under the Fair Credit Reporting Act. You are better off getting your file and selectively challenging the items that are incomplete or inaccurate.

Even if the credit bureau removes information that a credit bureau had the right to include in your file, it's no doubt only a temporary removal. Most correct information reappears after 30-60 days, because the creditor that first reported the information to the credit bureaus will report it again. Get outstanding debt balances and court judgments removed from your credit file. Credit repair clinics often advise debtors to pay outstanding debts if the creditor agrees to remove the negative information from your credit file.

This is certainly a negotiation tactic you want to consider, but you don't need to pay a credit repair clinic for this advice. Advise you to get a major credit card. Credit repair clinics can give you a list of banks that offer secured credit cards -- credit cards used against a balance you deposit in a bank account. While this information is helpful in rebuilding credit, it's not worth paying for -- you can find this information yourself for little or nothing.

The federal Credit Repair Organizations Act prohibits for-profit credit repair clinics from engaging in certain practices and making certain claims about their services. Many states regulate credit repair clinics as well. Some dubious credit repair clinics have tried to get around these regulations by setting themselves up as nonprofits. Before using any organization that claims to be a nonprofit, carefully check the company's fees, claims about its services, and reputation. Do the same with your local consumer protection agency.

There are many features of credit monitoring that are great whether you are trying to repair your credit or already have outstanding credit. Each of these features can benefit you in a different way. For those with good credit, a monitoring service will help you avoid Identity Theft and allow you to monitor changes in your credit score. For those struggling to build credit or repair bad credit, you can determine the negative items affecting your credit record and monitor your credit score for changes as you make efforts to repair your credit.

For those of you with bad credit, you most likely will want to monitor your FICO score as you attempt to fix your credit. The FICO score is the score most widely used by lenders when ascertaining whether to approve you for a credit card or loan. This is important to note when shopping for a credit monitoring service as many products will give you their own credit score and not a FICO score.

When creditors report to the credit agencies, they are not obligated to report to all 3 of the national credit reporting agencies. For this reason, it would be a good idea to get a copy of your credit report from each credit reporting agency. This will allow you to get an insight on which of your creditors are reporting to which credit reporting agencies. Also, you may find false information that is adversely affecting your credit, but at only one credit bureau.

There are many credit monitoring packages available and most will offer a combined 3 bureau credit report. This can be a great convenience since the format of credit reports from each agency is different. The combined 3 bureau credit report will be in the same format and will make it easier to spot the differences in the different bureaus credit report.

Once you have great credit you will most likely want to do everything you can to keep it that way. For this reason, monitoring your credit reports and scores is vital in maintaining that great credit you worked so hard for. All of the credit monitoring services that I have reviewed or personally used have email alerts that will let you know about major changes in your credit report or changes in your credit score. Major changes in your credit report of score could be an indication of Identity Theft and so this is one of the best ways to alert you of this possibility.