Are Credit Repair Law Firms Scams?

by Barney Gissen

Many Americans are finding themselves juggling credit card bills, along with student loans, home equity loans and primary mortgage loans. Because they want to keep their credit score intact for future borrowing, they get afraid when they start to fall behind on payments. Then, they see ads for credit repair law firms and decide to hire one to keep their credit protected. I know because that is what happened to a friend of mine.

While I was skeptical, she told me that the credit repair law firms charge a $100 set-up fee and then a monthly fee of $40-$80 to fix your credit and you move on. Well, this sounded too good to be true. I pointed out to her if she used that money to pay on her bills, and negotiate with her creditors, she could fix her own credit. In fact, there is credit repair software available that costs less than the set-up fee that can help a person do just that.

Nevertheless, she enlisted the help of one of these credit repair law firms, paid the set-up fee, and that’s where the work began. They needed her to sign and get her signature notarized on power of attorney forms, and other legal documents. Then they needed her to get her credit reports from the agencies and send to them. Then she had to go through and see what was on each one that she wanted to dispute.

She was spending hours working on her own credit to give to the credit repair law firms office, and paying them a monthly fee to do it.

I pointed out to her, that you can get a free credit report from the three credit reporting agencies, once a year, for no charge, on your own. You can dispute inaccurate information on your own. I had no idea what the credit repair law firms people were doing for her, other than collecting her money and sending form letters to dispute things she could have done on her own.

The thing I discovered about the credit repair law firms were that they charged high monthly fees, you have to do most of the dirty work yourself, and there is no guarantee that after you pay out over a thousand dollars, your credit will be any better off than when you started, or what you could have accomplished without them.

There are credit repair software programs on the market that can help you accomplish the same things for around $100, and you save the monthly fees to go towards your bills and not to pay a law firm to instruct you. If you are at the beginning of credit problems, you are smart to get a grip on it early, however, most of the time, you can repair your own credit faster than credit repair law firms can.

If you are considering using credit repair law firms to improve your credit score, you may want to do some research and consider fixing it yourself or use some credit repair software program. This will be more affordable, and you will have to do a lot of the work anyway if you hire credit repair law firms, and there is no time or results guarantee.