Credit Repair Companies – What They Can’t Do

Posted by Nikitas Tsoukalis on October 20, 2013

Credit Repair Companies – What They Can’t Do

Credit repair companies can be immeasurably helpful when improving your credit records. They can put in the hours that you can’t spare to get inaccurate entries removed and use their years of experience to negotiate fair and feasible payment plans on legitimate debts. Countless clients have seen their credit scores drastically improve after seeking help from a legitimate credit repair company.
But, they are not miracle workers. There are many things that no credit repair company can do. Run from any that promise any of the following:

Erasing Bankruptcy

Only time can make a bankruptcy disappear from your credit report. The amount of time it takes depends on the type of bankruptcy; a Chapter 7 bankruptcy remains for 10 years, a Chapter 13 for seven.
However, that doesn’t mean that the impact of your bankruptcy will last that long. The debts involved will age off more quickly. And, as you establish new, positive records, the bankruptcy will become less important as responsible credit use brings up your score.

Releasing You from Legitimate Debts

If a creditor can show that you owe a debt, it remains your responsibility. There is no way to make a legitimate debt disappear. It must be paid, discharged in a bankruptcy, or age off your credit report to make it disappear.
Many people have bad debts on their credit report in error. A credit repair company can seek verification of the debt and have it removed if the creditor cannot show proof that it is yours. A credit repair company can also help you negotiate a settlement for less than the full debt amount.

Giving You a New Credit Identity

There are some shady credit repair operations that will promise you a clean, new credit identity, free from your prior debts. There’s no kind way to say it: these people are scammers, plain and simple. The way to racket works is this: they register for an Employer Identity Number (EIN) for you. This is a nine-digit number that looks like a Social Security number. However, it is not used the same way; it is meant to be used by companies for tax purposes. Using an EIN in ways other than it was intended is against the law, and can result in hefty fines or even jail time. Don’t let these underhanded businesses ruin your good name.
Getting You Loans You Are Not Qualified For
A credit repair company can help you put your best financial foot forward by cleaning up your credit report and recommending actions that will boost your score. But, they can’t get you a loan that you are not qualified for; your income, credit history and other often immutable factors determine what deals lenders will extend.
In any financial situation, educate yourself and be realistic about outcomes. By knowing what you can reasonably expect, you can better plan for the next step in your financial future.