Credit Repair Is a Lie

The Federal Trade Commission (FTC) recently charged seven companies with violating federal law when they promised to removed negative information from people’s credit reports. The truth is that incorrect information can be removed from credit reports, but accurate information cannot.

So if you’ve got negative stuff on your credit report, but it is correct, then it can’t be removed by anyone. These “credit repair” agencies that promise the removal of all negative information are lying to consumers, and they’re finally being held accountable. The credit repair business is usually lucrative, as consumers are charged thousands of dollars for the services. The companies falsely promise to remove things like late payments, delinquencies, charge-offs and bankruptcies.

The companies being pursued by the FTC are charged with violating the Credit Repair Organizations Act by misrepresenting the services they’re providing and failing to provide contracts and proper disclosures. Consumers need to eye any offers to repair credit very carefully. If your credit report contains inaccuracies, they can be removed without paying thousands of dollars to a credit repair company. There is no silver bullet when it comes to credit scores and credit report information: The only thing that fixes legitimate negative information is time and better behavior in the future.

Tracy Coenen is an On The Money contributor, fraud investigator and forensic accountant, and the author of Essentials of Corporate Fraud.

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