Credit counseling services have acquitted a stigma in the United States. To blame for this negative perspective on these services rests on those credit repair counselors who have deceived and misled their clients.
General advice is that you should repair your credit on your own if you can. Do not visit a credit repair counselor if you can avoid it, with one reason being that you will need to share information which may be mishandled later. Credit consolidation or working with creditors to reduce your interest rate on credit cards of credit loans may be good options to pursue, but should be researched thoroughly to determine if it will actually help your credit situation and not damage it further in the long-term.
Most creditor counselors do little to help your credit score while most offer debt reduction. This is not the same as improving your credit score. The reality is that your credit counselor may actually reduce your credit rating if they do not submit your payments on time, which sometimes does occur. Your credit report will include a note such as “30 days late” which could be avoided if you are submitting the payments yourself.
Some credit repair companies may mail letters to the credit bureaus stating that the information reflected is incorrect and demand this information be removed until an investigation is completed. Credit bureaus remove the negative information and wait for a report to come in. The credit companies will then provide their clients with a “clean” report to show that their credit rating has indeed improved. The problem is when, or if, those negative notations return following the investigation.
This does not intend to mean that every credit repair organization is illegitimate or a scam. Some agencies are honest and have earned their reputation. Such agencies can be trusted to remove negative information which is actually incorrect. This is, however, the most that a credit repair agency can do to improve your rating. No agency can remove negative information that is correct and this information remains on your credit report for seven years from the time it is reported. Even worse, a bankruptcy remains on a credit report for ten years.
It is always a better option to handle credit issues yourself. Choosing this option will avoid providing personal information and you will know what your actual credit rating is.