Do Free Credit Repair Services Really Work?

Do free credit repair services really work? The short answer would be no. But this answer would be a disservice to a fairly complicated subject.

As I learned from my own experience after a particularly messy divorce, my credit was shot and I had bills up the wazoo! I would describe into whose wazoo I wanted to place these bills, but that would be an altogether different article.

As we move towards a more connected society, a person's credit rating becomes ever more important. Being approved for loans, the interest rate you receive, even employment opportunities can be affected by your credit rating. Knowing this I decided to find a free credit repair service.

The first thing I learned is that there are two different processes. Credit repair, and Debt consolidation.

Firstly, I realized that I would benefit from debt consolidation. This is a service that is beneficial if you currently have unpaid bills, and more particularly, if you have accounts in arrears. In a nutshell the service will work like this: The Company will take stock of all of your debt payments, and then contact these debtors, (Credit card companies, Mortgage companies' auto loan holders, etc.) Your consolidator will then negotiate better terms for you. Such as lower payments, lower interest, or Partial debt forgiveness. Then they will request one monthly payment from you, to cover all of the combined debt. Keep in mind that the consolidation company will also charge a little over the debt payment, as their fee. Usually there is no up-front payment, so this is how they are reimbursed. In my case for an approximate monthly payment of $532, I paid an additional 48 dollars. But I realize they must also make a living. I used Care One, and I was quite satisfied. They were professional, timely, and always returned my correspondence.

Now here's the rub; if you consolidate your debt using this method, it WILL show on your credit report. But it is far better to use this method, than to have an account in collection, or worse...Bankruptcy on your report.

After this step is taken, if needed, it is time to repair your credit. Of course the first thing I did was to seek a free credit repair service. I tried several of them. But to no avail. But I did learn a few of their tricks that they used to hook me in. To be fair, in my heart of hearts, I could not understand how they could offer this service for free. And of course they didn't. You will get advice to begin, but you will be told that you must upgrade for the "good" advice, and the "premium" services. Sound familiar? I guess the old wisdom is true; maybe there is no such thing as a free lunch. But then again why should there be? You get what you pay for! Pound wise and penny foolish... A stitch in time.... Ok I stopped... (I am addicted to adages!)

I tried four different free credit repair services, and was to a greater or lesser degree, disappointed. In the end I went to a local accountant specializing in this service. He asked me question, viewed my documents and situations. Then he actually helped repair my credit. Not t perfect but much better than it was. Sure, I paid a total of $350, but I believe the improvement in my credit saved me FAR more than $350!

So, in my not so humble opinion, with the hell of experience under my belt, I will leave you with this: If you have current, debt that you are having major problems repaying, use a consolidator. I recommend Care One, but I am sure there are others just as reputable. As for the free credit repair services... I was disappointed. It is well worth it to pay a professional for this. Ask around, references from friends are usually the best.

But no matter what road you chose, do something now! Your credit does not repair itself. It will only grow worse in time if left unattended. I wish you luck... Been there, Done that.