Ads on the radio and internet run rampant lately for credit repair services, which can help you clear up errors on your credit report, settle disputes and have old debts erased quickly. But is it worth it to pay a credit repair agency for their services? And are these companies legitimate?

The answer is maybe. People hire contractors and companies for all kinds of tasks they don’t want to — or feel they can’t — do. I would never dream of doing my own taxes, and the peace of mind I get is well worth the fees I pay my accountant.

Maybe you’re good with numbers and familiar with IRS laws — you may feel an accountant is a waste of money. So you can see, the question of whether or not to hire a credit repair service is a personal choice. But do you really NEED one? Can a credit repair service do anything you can’t do yourself? The answer is no.

With a little time, effort, and education, you can accomplish everything a credit repair agency would do for you. It starts with obtaining copies of all three of your credit reports and scouring them for errors, discrepancies, and black marks like late payments or unsettled debts.

How to Repair Your Own Credit

Start with the agencies. Obtain free copies of your credit reports from all three major national credit reporting agencies:

• Experian
• TransUnion
• EquiFax

If you see an error, begin a dispute in writing. Include copies of any documented proof that the information is inaccurate. Send the letter certified mail, return receipt requested, to the address for disputes listed on the credit reporting agency’s website. The Federal Trade Commission provides a sample letter on their website; you can pattern your own dispute letter off the one provided.

Keep in mind, you cannot “fix” legitimate debts on your credit report–most judgments remain on your report 7 years; bankruptcies stay on your report for 10 years.

Need a Fast Fix?

Are you buying a home and need a “fast fix” on your credit report to get a better interest rate on your mortgage? Fixing errors on your credit report is typically a slow process, but there’s a way to get results in 72 hours to two weeks — and it’s not through a credit repair agency.

Any credit repair agency that promises immediate results is a scam. According to an article at MSN Money, companies that offer “rapid rescoring” cannot legally work directly with consumers; they work with lenders and mortgage brokers to fix last-minute errors that may pop up on a credit report in the days before buyers’ close on their new home.

This happened to me when a delinquent loan showed up on my husband’s credit report days before we closed on our mortgage — the loan wasn’t his, but belonged to someone else with his name. We merely had to provide his social security number, and our mortgage broker handled the rest through a legitimate rapid re-scoring agency. The error was fixed prior to closing and we proceeded with the purchase.

Don’t Want to Do It Yourself?

With the number of scam artists in the world of credit repair, we highly recommend you fix your credit yourself rather than hiring a credit repair agency.

If you do opt to hire an agency, look for the following red flags to spot a scammer. Steer clear if the credit repair agency:

• Expects you to pay before they provide services (this is illegal)
• Doesn’t tell you what you can do for yourself, for free
• Recommends you NOT contact the three major credit reporting agencies directly
• Tells you they can make your credit perfect/erase all negative information (this may not be possible if you have legitimate unpaid debts)
• Says they can repair your credit overnight or immediately
• Suggests you invent a new credit identity

Since, unfortunately, there seem to be more fraudulent “credit repair agencies” than legitimate ones, you should instead seek the help of a credit counseling service. You can find one through the National Foundation for Credit Counseling (NFCC).

A reputable company will counsel you on the best ways to repair your credit, starting with disputing errors on your credit report and then working out a plan to pay off your existing debt, perhaps helping you to negotiate lower interest rates. Repairing and re-building credit is a long-term endeavor, not a quick fix.

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