People with bad credit are in a bad situation. Even if you just cleaned up your act, it can take a long time and a lot of work to get your credit score back where it needs to be. This can be especially frustrating if you're trying to get a small loan or mortgage. So, if you have bad credit and someone sends you a letter saying they can fix it for a small fee by the end of the week, you will probably sit up and pay attention.
You'll probably also fall for a scam, which is bad. Every day, companies send out flyers, write letters, and even call people with bad credit to tell them they can fix their credit problems. These companies offer different ways to do this. Some of them work, but only for a short time (no more than a day), and others are just plain wrong. At the same time, they take money from people who need it the most.
"If it seems too good to be true, it probably is," is a good rule of thumb. If you receive a letter or phone call that says, "Credit issues? No problem!" or "We can fix your credit report right away! "There's a good chance that someone is trying to take advantage of you. These companies know that people who are in debt are often desperate and looking for a way out. They take advantage of this by offering services they can't really give to people who can't pay for them. The hard truth is that the only way to fix your credit is to work hard and carefully over time. No one has a magic wand that can wave away all of your overdue balances.
But this doesn't mean that you can't find services to help you. In fact, there are a lot of non-profit debt counselling services that can help you pay off some of your debt, but that doesn't mean that your debt will go away. The consultants at these groups can help you balance and manage your debt. They can also talk to your credit card company to help lower your monthly payments, late fees, and finance charges, and maybe even give you more time to pay off your debt. Don't let fake help scare you away when real help is available.
After that, there are a lot of things you can do to fix your bad credit. The first thing you need to do is look at your credit report. You can get it for a small fee (less than $10) from any of the major credit-checking agencies. Depending on your situation, you may even be able to get it for free (if you have been denied credit, for instance, you will be entitled to a free copy).
Next, you'll need to look over the report carefully to see if any of the information is wrong or out of date. If you find mistakes, you'll need to tell the consumer reporting company about them. Send copies of documents that back up your claims to show that you are telling the truth. Once you've worked out any disagreements, you'll have to do the dirty work of making a payment plan that you can stick to. If you think you need help, you can call a debt counselling service. The only way to get your finances back on track is to slowly pay off your debt and start using credit wisely after you have done so. It won't get you back on your feet overnight, but with time and effort, it will.
