A credit repair service offers to help you clean up your bad credit report so that your credit rating will improve and you can qualify for a less expensive loan. Credit repair services make great promises which aren't always fulfilled. You can improve your credit worthiness, a common term that means your 3 digit numerical rating from the credit bureaus can improve but it will take diligent effort on your part. It's important for you to recognize which credit repair service is legitimate and which is better described as a credit repair service scam. If you recognize the warning signs of illegitimate credit repair services, you can avoid further financial hardship. For instance, never pay in advance for a promised service. Do not trust companies that avoid explaining your legal rights and what you can do for free. Don't be fooled by credit repair services that want to "sell" you a new identity. Finally, don't follow any credit repair service advice that is illegal, untrue, or fraudulent---you can be prosecuted.

The fact is that all negative credit information is locked in by each of the three national credit reporting companies (Equifax, Experian, and TransUnion), and will stay locked unless you have an honest reason to dispute inaccurate or incomplete information. You are welcome to a free credit report once a year or anytime within 60 days of someone denying you credit. Any mistakes or outdated items can be disputed for free by proving (with written documentation) exactly what the consumer reporting company should change and why. Plus, you'll need to contact your creditor who made the inaccurate report so that a correction can be submitted. If you handle credit repair yourself, all documentation and follow-up will be your responsibility, but a credit repair service can help by: pulling credit reports, reviewing for errors, writing and sending dispute letters, documenting disputes, and keeping track of the whole process.

You can do all of this yourself for free, but you may not want to. A credit repair service cannot erase accurate negative credit information about you. They can't make false claims about credit repair services. For your protection, all credit repair services must give you a copy of the "Consumer Credit File Rights" before you sign a contract. The credit repair service contract must specifically outline all credit repair services like the total payments, detailed description of services, how long it takes to get results, any guarantees claimed, and all of their contact information. Even so, credit repair services cannot help you for three days after the contract has been signed so that you have ample time to change your mind. Credit repair services are not necessarily reputable credit counselors. If you are burdened by bad credit, there are non-profit credit counseling organizations who can help teach you how to manage your finances using all the free information available to you.