Blog Highlights
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Awareness: Learn how credit repair companies really work and why their “quick fixes” often lead to high fees, false promises, and risky tactics.
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Protection: Understand the warning signs of credit repair scams so you can protect your money and your credit from unnecessary harm.
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Solutions: Discover safe, effective, and low-cost ways to rebuild your credit, including self-help steps and trusted resources.
Having and maintaining good credit is essential for financial stability. It gives you access to better loans, credit cards, jobs, and even housing. However, sometimes life happens and brings unexpected situations that can negatively affect our credit score.
When this happens, turning to credit repair companies boasting quick fixes can be tempting. Before you decide to use a credit repair company to "help" fix your credit, be sure you understand the risks and hidden dangers involved.
How Credit Repair Companies Work
Credit repair companies are businesses that claim to help people improve their credit score by disputing inaccurate or negative information that's showing on their credit report. They often promise fast improvements and are known to charge costly fees.
While these companies can dispute inaccurate information, they cannot legally remove accurate negative information. In addition, they're required by law to provide customers with a written disclosure of their services, customer rights, and costs.
The truth is you can do many of the services credit repair companies provide on your own and at no cost at all.
- Request a copy of your credit report from each of the three main credit bureaus – Experian, Equifax, and TransUnion.
- Check them for accuracy, and dispute any errors and incorrect information.
- If the information is inaccurate, it will be removed at no cost to you.
Before Using a Credit Repair Company – Consider The Risks
Using a credit repair company can actually involve more risks than helping your credit score. Misleading claims, high costs, and questionable business practices can leave you in a worse financial position.
If you're considering using the services of a credit repair company, we encourage you to consider the following before deciding to move forward:
- Costs: Charges substantial amounts for setup, service, and monthly fees.
- Misleading Claims: Unrealistic promises may delay or deliver results that yield little or no real improvement.
- Too Good to Be True: Use of risky, illegal tactics and unethical business practices can lead to more financial woes.
- Temporary Fix: Credit repair companies follow a reactive not proactive model and do not focus on helping people build or maintain a healthy credit profile.
Common Signs of a Credit Repair Scam
Unfortunately, there are many variations of credit repair scams out there. Some may pose as legitimates businesses to defraud you, while others are actual businesses that may use unethical practices.
Here are some red flags that may indicate you are involved in a credit repair scam.
- Use of high pressure tactics that get you to act immediately.
- Promises to remove accurate negative information. No one can legally remove accurate and current information from your credit report.
- Asks for payment upfront and requests untraceable payment methods (prepaid debit cards or gift cards, money orders, Cryptocurrencies) but does not provide services.
- Fails to provide a contract and explanation of your legal rights and/or doesn't clearly explain the process.
- Tells you not to contact credit bureaus directly – you have the legal right to dispute errors yourself at any time.
- Offers to create you a new credit identity for a fee. They'll direct you to set up a Credit Privacy Number (CPN) or an Employer Identification Number (EIN) using stolen Social Security Numbers.
Safer Alternatives for Fixing Your Credit
Instead of wasting your time, money, and taking the risk of potentially being scammed by a credit repair company, follow these tried and true, cost-effective steps to repair your credit on your own.
- Review your credit report regularly and dispute legitimate errors directly with the credit bureaus.
- Set up auto-pay or payment reminders to avoid late payments.
- Bring past-due accounts current.
- Pay down high balances and keep your credit utilization low.
- Avoid closing old accounts to maintain a credit history.
Get Help from Trusted Resources
When it comes to credit repair, and building and maintaining a good credit history, we provide our members with a variety of safe and credible support options.
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Balance Financial Fitness Program: Peach State members can take advantage of the financial education and resources from the industry experts at Balance for FREE. They also provide FREE credit report reviews and one on one counseling that teaches you new skills to get ahead and create a secure financial future!
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Share Secured Loan to Rebuild Credit: Members who need to build or improve their credit can focus on making affordable monthly payments while funds are secured with deposits in a savings or share certificate account.
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Fresh Start Auto Loan: A second chance auto loan program focused on helping members with less than perfect credit finance a vehicle.
- Create Positive Financial Habits: Whether you’re building credit or have a few improvements to make, the best first step is knowing how to get started. Check out our helpful blog Simple Steps for Maintaining Good Credit to learn easy financial habits that'll positively impact your credit.
Take the First Step Towards a More Secure and Empowered Financial Future With Peach State
Credit repair is something that takes time, patience, and consistent effort for success. Avoiding expensive shortcuts that can cause more harm than good is a smart money move.
Check out these helpful reads from our Dollars & Sense blog about building, repairing, and maintaining good credit.
If you're ready to take control of your credit's future, we invite you to contact our team to learn more about how we can help you reach your financial goals today!
