Free Credit Repair and the Consumer

Free Credit Repair and the Consumer

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You may have seen the ads where a company touts its free credit repair program with the promise that the customer’s bad credit is soon made good again. It is impossible to comment on every company, but it is advisable that the consumer do his or her research before committing to such a program. As with anything, the “free” aspect should be carefully explored. Fortunately, there are ways for you to get help with your credit at little or no cost to you.

What is being advertised — Some credit repair providers do provide free services, but these services are basic and do not go far enough to clear your record. If a company offers to provide free credit monitoring, typically you will pay for another service, such as obtaining your credit reports.

Please know that you can get your credit reports for free from the three credit reporting bureaus. A federal law that kicked in back in 2005 guarantees consumers access to their reports from Trans Union, Equifax and Experian. You can get these reports from AnnualCreditReport.com. They are free as long as you order no more than once annually for each company.

Free credit score — Although credit reports can be had for free, the same cannot be said about your credit score. Well, not usually the score as supplied from one of the credit reporting agencies or FICO.

You can however, get a credit score that is awfully close to your actual score. A company called CreditSesame provides what is known as a TransRisk score, one that is based largely on the TransUnion credit scoring formula. It does provide an accurate assessment of your credit picture, something you can obtain for free by visiting CreditSesame.com. Yes, you will have to endure the sales pitches, but that is the exchange you make for getting something that is free.

What you are receiving — You may be offered a sample of free services from a credit repair service. Those services, although free, may not go far enough to offer you real relief. So-called credit monitoring may be offered for free, but expect that even a fee will kick in here after your 30-day trial is up.

If you need help that goes beyond the basics, expect to pay a fee for these services. What may be included here is credit repair counseling, the renegotiation of your debt with lenders or help with formulating a budget. Most of these services are charged on a sliding scale, reflecting your ability to make payments.

Local programs — There are a pair of local programs that might help you gain credit relief for little or no money. Some programs are run by your local government. Other programs are faith-based and may be handled by a church or other nonprofit organization.

With local programs, you may be placed in a group and receive instruction. You may also get individualized counseling by appointment. In some groups peer assistance is what helps consumers. Other groups bring in professionals that help consumers on an ability to pay basis.

Credit Tips

You should know that much of the credit repair you seek can be handled by yourself. You can call creditors directly and negotiate rates and discuss payment plans. In fact, you may find that dealing directly is preferred by some creditors as they can learn directly what struggles you are facing without hearing about that through a third party.

Also, you should know that not everyone that calls himself a credit repair counselor is trained or certified. Contact your state to find out how consumer credit management is viewed. It may be wholly unregulated or the state may required such individuals to be licensed and perhaps carrying a title such as certified financial planner. Know the distinction before using any person who may or may not be qualified to help you. Importantly, when you hear the word “free” being used, make sure you understand what that means.

Author Information

Jenny Willis is a professional blogger that enjoys providing consumers with personal finance advice. She writes for Purechecks.com, a leading check printing company of designer personal and business checks.

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