A credit report is basically like a college transcript, but instead of showing grades, it’s a record that tells companies or lenders whether or not they can trust you with their money. This is why it’s harmful to have bad credit – having bad credit can prevent you from getting a loan, mortgage, insurance, and even some jobs! Credit repair companies claim they can fix bad credit scores, but you need to be wary about how they do it. There are a lot of scam companies out there that can prey maliciously on desperate creditors. Here are some things to look out for when considering a credit repair company.

- A credit repair company cannot erase truthful information. They can only fix inaccurate info – a record keeps track of your whole credit history for the last 7 years, so the company legally cannot eradicate any correct information.

-Be wary of places that ask for payment upfront. Laws require credit repair companies to give you a list of your rights up front before agreeing to a contract. The Credit Repair Organizations act also protects individuals from credit repair scams by outlawing companies to force payment on their customers before they complete their services.

-Creating a “new” credit identity using an EIN. A fraudulent company may suggest to you that applying for an Employer Identification Number (EIN) can help you create a new credit identity.

This in untrue since an EIN is not considered personal info and numbers can actually be published in print or on the Internet.
Repairing bad credit scores take time and there truly won’t be a quick fix to your problems. To get on the right path towards good credit, start by checking your credit report and make sure there aren’t any mistakes in the documentation. And lastly, keep on top of your payments! Do not miss any and stay on top of them to give yourself a good score.