What Results Can You Expect from Credit Repair?

Credit repair can dramatically improve your financial profile, but be sure to approach it with realistic expectations. Learn what reputable credit repair firms can really deliver and how to avoid scams.

Credit repair can help you improve a poor credit rating due to previous financial blunders, identity theft or errors on your credit report. If you've been denied for a loan or being offered loans with unfavorable terms such as high interest rates, then you may be an excellent candidate for credit repair.

There are many credit repair firms advertising their services and making outrageous claims about the results they can produce. However, as with all services, you should proceed with a healthy amount of caution to ensure that you are not falling victim to a scam or even being enticed to participate in illegal activities. The old adage, "If it sounds too good to be true, it probably is," definitely holds true when it comes to credit repair.

There are legitimate credit repair companies that can offer a great deal of assistance to those seeking to improve their credit report. To avoid unscrupulous credit repair companies be cautious of the following:

• Companies who do not inform you of your rights
• Companies who suggest you create a new credit identity
• Ask for fees to be paid before credit repair services are rendered
• Recommend you not contact the credit bureau to discuss your credit report
• Companies who offer 100% guarantees on credit repair

The above characteristics due not automatically identify a credit repair company as fraudulent but when these signs are evident, investigating the company further before making a decision is recommended.

The reality of what results can be expected from credit repair may be disappointing to those who are expecting magical results but it is definitely a worthwhile effort. While credit repair can make a significant improvement in the interest rates individuals are offered, legitimate blemishes cannot be completely erased by credit repair. The following is a brief list of attainable results from both passive and active credit repair methods:

• Mistakes on credit reports can be disputed and removed if they are found to be erroneous
• Credit scores can be increased through demonstrating good credit practices
• Debtors are provided with information on actions to improve their credit score
• Debtors are educated on the information provided on their credit report and which items are favorable and which are negative
• Over time blemishes such as bankruptcies, collections actions and late payments are removed from credit reports

There are a number of faulty expectations many debtors have. The following is a brief list of results many unrealistic individuals expect from credit repair:

• Legitimate bankruptcies or foreclosures will removed from the credit report - credit repair companies do not have the ability to produce this result
• A new credit identity will hide previous transgressions - this is not credit repair, but an illegal process known as segregation and is punishable by fines and a prison sentence
• Credit will be repaired instantly - removing mistakes from a credit report will likely take at least a month; legitimate transgressions will take significantly longer to be repaired.