Credit Repair Companies: Friend or Foe?

With an increase in credit problems flying around the country, opportunists have seen the benefit of opening credit repair businesses. These credit repair companies charge upfront fees, usually ranging from $1,400 to more than $2,000, to scrub credit reports clean of bad credit, bankruptcies, late payments and more.

First, it's ironic that people with bad credit--usually due to lack of or non-payment of their debts--would have a couple thousand dollars to repair their credit. Whatever the situation, those that have paid the upfront fees to credit repair companies have been left holding the bag. They lost their upfront fee and still have all of the negative credit items showing on their credit report that they originally had.

The Federal Trade Commission (FTC) reports a 50 percent increase in complaints filed by consumers of credit repair scams. They also report that they have not found a legitimate credit repair company yet.

The fact of the matter is that anything the credit repair company can do, you can do for yourself--and all it costs you is a little bit of your time. Find out how to you can make yourself look credit worthy in Credit Scrutiny: What You Can Do to Make Yourself Look Worthy to Creditors