There are a lot of credit repair scams, lies and myths floating around. To begin our credit repair tutorial we want to start with a fresh perspective on the truth about credit repair. Below you will find the real facts about credit repair with a few of our opinions thrown in.
The truth is, credit repair is 30% know-how, 30% effort and 40% persistence. Credit repair is akin to paddling up stream. If you stop paddling you will drift back down-stream. However, if you are persistent, you will eventually make it to your destination.
Credit Repair Scams and How to Avoid Them
The Quick Fix - If you listen to the advertising from some of the less reputable credit repair companies, it’s easy to believe that your credit can be cleaned up in 30 days, or some other specific time period. That’s a lie. Your bad credit did not happen overnight, and it will not clear up over-night. Nothing, or no one, can repair your credit any faster than working the steps outlined in this tutorial.
Those who advertise “fast credit repair” are the same people who want to be paid up-front before “repairing” your credit, these are usually credit repair scams. Legally, credit repair services can’t ask for payment from their clients until they’ve kept their promises. Nobody can repair your credit any faster than you can … if you know what steps to take.
The time it takes to repair credit is directly related to each person’s specific credit issues, and everyone’s issues are different. On occasion credit can be repaired quickly, but that is the exception not the norm.
Consumer Credit Counseling – Consumer Credit Counseling Services (CCCS) are companies designed to help you “manage” your debt and lower your payments by negotiating with your creditors. Some of these are a non-profit organizations that mean well, however, some are not and they are in it for the money. I won’t steer you in any direction about whether or not to use CCCS services, however I will share my opinion with you.
Here’s my opinion – CCCS companies cannot help you anymore than you can help yourself. Here’s why. The main service that CCCS performs is that they call your creditors, or they already work with them, and arrange for you to make a lower payment with them. Once they have made these arrangements with all of your creditors, they roll all of your debt into one payment that is usualty lower and more manageable.
What the CCCS may or may not tell you is: that when you to pay less than the full payment each month with your creditors, the creditors continue to report the late payment each month on your credit bureau.
These late payments stay on your credit bureau for seven years from the last late payment. Meaning, if it takes you two years to pay off your debt with a CCCS; it will take your credit seven years FROM YOUR LAST PAYMENT to clear up. So, you are basically doing the same thing that filing chapter 13 bankruptcy does for you without the protection from the creditors that bankruptcy gives you.
Furthermore, it will be posted on your credit bureau that you are in “CCCS”, and most creditors treat this statement on your credit report the same way they treat a bankruptcy. The difference being, when you are through with CCCS, this statement can be removed immediately from your bureau, whereas, if you filed bankruptcy the “bankruptcy” it will stay on your bureau for 7 years.
Keep in mind though, that while in CCCS you are paying your creditors late EVERY month, and they are reporting your late payments on your credit bureau. It will take seven years FROM YOUR LAST PAYMENT for those marks to fall off.
You Don’t Have to Pay off bad Debts to Repair Your Credit - If your goal is to clean up your credit without having to make any sort of restitution to the people that you owe money to, you might as well stop reading. Credit repair involves making amends, this doesn’t mean that you will have to pay back every debt, or even the full amount, However, you WILL have to pay some, part, or even all of your debts during the credit repair process. Paying back old debts is strangely therapeutic and very conducive to helping you manage your debt moving forward.
Credit Repair Software – Phooey! If you want to pay someone $300 for a program that tells you what to do and when to do it, please send it to me, I have four children in braces. No program can get you any closer to good credit than this tutorial can. We will show you what you need to do to repair your credit step by step. If you have unanswered questions at any time simply post them in our forum and I will do my best to answer them.
(Update) One of our readers recently pointed this out to me. It appears, that there are some programs that exist to help you manage the process of repairing your credit. Meaning, it acts as a calendar, and a notebook for remembering contact dates and times. I can see where this could be advantageous, however, I still think a notebook and pencil are better 8-).
I haven’t looked at all of the available programs, but I did look at CreditSesame.com, which isn’t specifically for credit repair however, it does track and manage your finances and give you free credit scores, and it’s free! (Disclosure … they give me a few bucks for flogging their products, but I really do like their product 
Hiring a Professional - I have no issues with hiring credit repair experts to repair your credit, just remember, they perform a service not miracles. If you don’t have the time or inclination to deal with creditors, collection agencies and credit bureaus, I suggest you look into hiring one.
Just beware of the credit repair companies that make promises to “clean your credit” or get you a certain credit score within a certain time frame. A good rule of thumb is, if the credit repair company infers that they can do what other companies can’t do, these are the credit repair scams.
Editors Note: If you intend to hire a credit repair company, please consider 
Lexington Law for your credit repair. They are 100% legitimate and have a great reputation, AND most importantly, they send me a few bucks for recommending you. 
Can I Get my Credit “Erased” or a New Credit Profile? – Absolutely! This practice is called “file segregation,” and it’s illegal. Besides that, it doesn’t work for legitimate people in every-day society, only for people trying to assume a different identity. Unless you are interested in free room and board and roommates called Bubba, I would avoid people who say they can do this for you. In fact, I would probably report them to the FTC.
Can I Remove a Bankruptcy? – No, unless it is over the statute of limitations or it isn’t yours.
Can I Remove Back Child Support? – No, in fact, if you owe a substantial amount of child support and you are unable, or unwilling, to pay it back, you can stop reading now. Most credit underwriters and auditors are women, which means that you stand a better chance of winning the lottery than getting approved for credit while owing back child support.
Now, I do understand that there can be some legitimate reasons that you may have back child support issues However, right, wrong or indifferent, this is the kiss of death if it’s on your credit bureau. You must deal with this issue before attempting to do anything else in regards to repairing your credit.
What about Tax Liens? – I have to be careful here, I am semi-experienced in this matter. The problem is, tax laws can change as often as we change our elected officials. When dealing with tax issues NEVER accept ANY advice from anyone, INCLUDING ME, except from the IRS or a tax attorney.
That being said, federal tax liens can be negotiated some of the time, but only if the IRS thinks that they will never see a dime unless they negotiate. If you have state, city or county tax liens, these almost always have to be paid in full, usually at the courthouse.
Can Judgments be Removed? – Only after seven years from the time you pay it off. Credit Bureau’s will not remove judgments unless it has been rescinded in a court of law.
Last, and Most Important Myth: – That most people with bad credit are lazy people or irresponsible with their money. Most people with bad credit have lost a job, battled cancer, lost a loved one or have become disabled physically or mentally. Bad credit is usually a result of life’s unavoidable circumstance, not poor ethics.
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