If you have thought about using one of those credit repair companies, I encourage you to re-think your position. In this article I will give you some pros and cons of using a credit repair service and the pros and cons of doing it yourself.

Let me start by saying the only pro I can find for using a credit repair company would be because of time constraints. If you cannot find an hour a day to devote to cleaning up your credit then you may want to retain the services of one of these agencies. I would recommend doing thorough research on the companies that are under your consideration.

Some of these companies promise you fast credit repair. There is no such thing as fast credit repair. The process takes time. Consider this; the average dispute with the credit agencies takes about 30 days. If the credit agency does not budge or claims the data is accurate, you are looking at another 30 days challenging with the creditor. Even if you win the dispute with the creditor it could take another 60-90 days for the item to disappear from your credit report. A number of these companies that promise fast credit repair are actually trying to get you to change your identity. That's right, new SSN, etc... Let me tell you this is highly illegal and unethical. Stay clear of these companies.

It violates federal law for any credit repair service to charge the consumer money in advance of providing the repair service. This is known as the CROA, Credit Repair Organizations Act. I have found in my research that the majority of these services violate this law. The reason for this law is that there are no guarantees that they can clean up your credit. Most of these services will charge you a monthly fee of anywhere from $60 to $100. Now, put that into real life using the lowest figure. They send a dispute letter to the credit agencies, it comes back and they say the information is accurate, well you are out $120 already. The first month of service plus the 30 days it took for them to report back to you. Now say they challenge the creditor, another 30 days for a response, $180 out the window and they may not even be able to get it removed. There are no guarantees they can remove something from your credit report regardless of what they tell you. See where I'm going with this? Do you have the money to throw away?

The way these companies repair your credit is by basically disputing everything on your credit report, some of the info comes back unable to be verified and does get deleted, some of it comes back updated and some of the good credit history goes away because the information was not accurate. That is not good; I don't care if a good piece of credit is inaccurate as long as it is helping me. Sometimes these companies can actually hurt your credit.

A point that I would like to stress is that anything these agencies can do for you, you can do for yourself much cheaper. They use a standard form letter that they send for all of their customers, you can write your own custom letters that would be much more effective, and at what cost? $5 for a certified letter? These companies thrive on the fact that most people do not know that they can repair their own credit.

Another pro for doing it yourself is the fact that you retain all your rights under federal law when doing it yourself. If you enlist the services of an agency to clean up your credit, you have given up many of your consumer rights under the FCRA, Fair Credit Reporting Act. This is very important and gives you , the consumer a lot of leverage when it comes to getting debts removed or corrected on your credit report.

Visit my blog to see my progress as I clean up my credit myself without using one of these agencies, and get links to resources that will help you on your way to your credit cleanup.