Do credit repair agencies really work?

Eraser on a credit reportSome credit repair companies make bold claims about removing bad credit, bankruptcy, tax liens, and judgments from credit reports.

Some credit repair companies even offer money back guarantees if they are unable to remove delinquencies. Can these companies really make these guarantees?

Ads That Promise a "New Credit Identity"
Companies promising a “new credit identity” say they can help you hide bad credit history or bankruptcy for a fee. If you pay them, these companies will provide you with a nine-digit number that looks like a Social Security number. They may call it a CPN — a credit profile number or a credit privacy number. Or, they may direct you to apply for an EIN — an Employer Identification Number — from the Internal Revenue Service (IRS). EIN’s are legitimate numbers, typically used by businesses to report financial information to the IRS and Social Security Administration — but an EIN is not a substitute for your Social Security number. The credit repair companies may tell you to apply for credit using the CPN or EIN, rather than your own Social Security number. And they may lie and tell you that this process is legal. But it's a scam. These companies may be selling stolen Social Security numbers, often those taken from children. By using a stolen number as your own, the con artists will have involved you in identity theft.

If you follow a credit repair company’s advice and commit fraud, you might find yourself in legal trouble. It’s a federal crime to: lie on a credit or loan application misrepresent your Social Security number obtain an EIN from the IRS under false pretenses The bottom line is that if you use the number they sell you, you could face fines or time in prison.
SOURCE: Federal Trade Commission

Illustration of two men shaking hands, one with crossed fingers behind his backWho do you trust to help you restore your credit?

It has been reported that fraudulent credit repair companies have cheated Americans over fifty million dollars in credit repair scams. People have flocked to the "credit doctors" only to find out that their results did not live up to their advertisements.

So, can credit repair companies guarantee results?

No credit repair company can "guarantee" to remove credit delinquencies. Offering a guarantee to completely remove bad credit from a credit report would be like a defense attorney guaranteeing that the jury will find his client innocent. Guarantees are a certain sign of fraud.

The credit bureaus oppose companies that offer how to do it yourself credit repair instruction and companies and credit repair companies.

The reality is that you do not need to live with bad credit for seven to ten years providing you are willing to challenge the verifiability or accuracy of your credit listings. It is feasible to rebuild creditworthiness within a shorter time.