How Do I Avoid Credit Repair Scams?

Nothing They Do Is Something You Cannot Do Yourself#

Cambridge Credit Counseling points out that nothing a credit repair company can lawfully do for a consumer is something the consumer cannot do for themselves at no cost. Disputing errors, requesting corrections, and reviewing your own credit report are all things you can do without paying anyone.

Understand How Credit Reports Actually Work#

Your credit score, sometimes called a risk score, is based on the information in your credit report and helps lenders judge how likely you are to handle debt responsibly. Credit bureaus only add information about you when a creditor, collection agency, or other business reports it to them. No outside company can change the facts that were actually reported, since those facts came from your own accounts.

Late Payments Follow a Specific Timeline#

A credit card payment generally has to be a full 30 days, or a full billing cycle, past due before it affects your credit score or credit report. Understanding this timeline can help you recognize when a company is exaggerating what it can “fix” versus what simply has not been reported yet.

Use Independent, Trusted Sources for Comparison#

The Consumer Financial Protection Bureau publishes guidance that explains the differences between credit counseling, debt settlement, debt consolidation, and credit repair. Reading that kind of independent material before signing anything with a credit repair company can help you compare claims against a neutral source.

Cambridge Credit Counseling Is a Nonprofit Alternative#

Cambridge Credit Counseling is a 501(c)(3) not-for-profit agency established in 1996 that has provided credit counseling and financial literacy education to consumers nationwide since its inception. Cambridge Credit Counseling offers credit counseling as a free service to consumers who are having difficulty paying credit card and other unsecured bills. Cambridge Credit Counseling is a member of the National Foundation for Credit Counseling and the Financial Counseling Association of America, and its counselors are certified through the National Foundation for Credit Counseling.

Free Tools to Learn About Credit on Your Own#

Cambridge Credit Counseling offers the Learn Now or Pay Later Financial Literacy Guide, which covers building a spending plan, setting short- and long-term goals, understanding credit reports and scores, and using credit wisely. Cambridge Credit Counseling also offers a Young Adult version of the guide, covering credit reports, credit scores, debt-to-income ratios, budgeting, and checking and savings accounts for younger adults.

What to Do Next#

Before paying anyone to “repair” your credit, remember that the same corrections and disputes are available to you for free. If you want to talk through your credit report or your overall debt situation with someone first, Cambridge Credit Counseling offers a free counseling session to help you understand your options.