Credit repair is big business, and there are many companies that will promise to help you get out of bad credit problems.  There are a number of legitimate resources that can help you in improving your credit score but there are also a number of less than reputable companies out there that will take your money but offer you few (if any) valuable services.  A few basic tips will help you see the difference:

Importance of  Seeking professional help

If you are in over your head, and your credit is so bad that you cannot get a loan and may even be facing bankruptcy, you may want to seek help from professionals.  There are a number of financial professionals that can help you with credit repair:

Bankruptcy lawyers and bankruptcy advisors: Bankruptcy lawyers can help represent you in bankruptcy proceedings.  Advisors can help you decide whether to apply for a bankruptcy and how to proceed once you do decide to file.

While getting a bankruptcy lawyer and filing for bankruptcy can be upsetting and can dramatically affect your credit score for many years, it can also give you a chance to start over financially and can help you reestablish good credit again in the long run.

Credit repair companies and credit counseling companies: These companies can help you by acting on your behalf with credit companies, by advising you on what you can do to repay your bills faster, and by helping you make better financial decisions.

Accountants and tax services: Accountants and tax filing services can help you make the most of your money by making sure that you do not end up overspending on taxes.

Bankers and bank officers: Most banks today want to not only help you keep your money but are willing to work with you to make the most of it.  As a banking service, many banks today offer free investing advice, saving advice, and personalized meetings with bank officers that can help you figure out your money situation.
Lenders and bad credit lenders: How you deal with lenders will determine how well your credit score works. Avoiding too many inquiries by not applying for too many loans, establishing long-term business relationships with bankers, and doing business with bankers in an organized and professional way (i.e. paying your debts on time) will go a long way towards giving you a credit rating.  In turn, a good credit rating will make it easier to deal with lenders.

Look out for credit repair companies.

Many companies out there advertise that they can help you with credit repair, but the quality of these services – not to mention what they offer – varies widely.  Some companies really can help you with credit repair while others are actually under investigation for suspect business practices.  If you decide to seek help from a credit repair company, be sure that the company is legitimate and offers you viable services.

In general, you should be looking for non-profit credit counseling services rather than credit repair companies (some of which are really just lenders offering home equity loans anyway, which are of limited use to you if you want to improve your credit).

Check to make sure that the company has good standing with the Better Business Bureau and clients who are happy with the credit repair services they received from the company.  Always read the paperwork carefully before you sign and make sure that you understand how much you are paying for and how much you are paying.

Before deciding to seek help from a credit help or credit counseling service, be sure that the problem cannot be resolved on your own.  Indications that you may need credit counseling include:

• You cannot pay your bills and avoid the necessities of life.
• You avoid the phone, the mail, and the door because you are being harassed by collection agencies.
• You have avoided going out because you feel terrible about your financial state.
• You have no idea how you will repay your bills and loans – you do not know where to start.

Seek free or inexpensive help before seeking paid credit repair help

If you need credit repair, odds are good that your finances aren’t in the best possible shape.  That likely means that you should attempt to spend as little as possible on credit repair – the money you save can be channeled into repaying your debts.  Before seeking credit repair services, follow the tips we have posted on this site in order to repair your own credit.

Also, seek out free or inexpensive sources of credit repair help.  Some non-profit credit counseling services are actually registered charities and will work on your behalf.  If you can get help from one of these companies or undertake credit repair yourself, you will be able to save money quite easily.

In addition, these companies tend to be more legitimate than credit repair companies that take your money, anyway.

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If you have a lower credit score that you would like, odds are that the score is caused by some small financial mistake or oversight you have made in the past. Not every person with bad credit has a low credit score caused by something they did, though. Sometimes, other people’s criminal activity can affect your credit score. There are a few tips that can keep you and your credit safe form online and financial predators:

Look out for identity theft.

Many people who are careful about paying bills on time and having minimal debts are shocked each year to find that they have low credit scores. In many cases, this happens as a result of identity theft. Identity theft is a type of crime in which people take your personal information and steal that information to pose as you in order to get access to your accounts or identity.

For example, someone with your PIN numbers can remove small amounts of money from your bank account each month or someone can use your name and personal information to get credit cards in your name and use those credit cards with no intention of paying back the money. You are stuck with the large debts and the poor credit score.

To prevent identity theft, always check your account statements carefully each month. Report any suspicious activity or any charges you don’t recognize at once. Also check your credit report regularly and immediately investigate any new credit accounts you do not recognize – this is the best way of detecting and acting on identity theft.

If you have been the victim of identity theft, report to the police at once and get a police statement. Send copies of this to your bank and credit bureaus. Better yet, get the credit bureaus to attach the report to your credit report, if you can. Close all your accounts and reopen new ones. You should not have to pay for someone else’s illegal activity.

Practice safe banking, safe computing, and safe business practices.

To stay safe from identity theft, always follow safe banking and financial practices:

1) Keep account numbers and PIN numbers safe. Cover your account and PIN numbers when using debit at the store and refuse to give your PIN number to anyone. Avoid writing down your PIN and account numbers – you never know when this information could fall into the wrong hands.

2) Only do business with businesses you trust.

3)If you get applications for credit cards in the mail that are “pre-approved” rip up the applications and enclosed letters before discarding them. No, this is not paranoid. Identity thieves sometimes go through garbage in order to find these forms so that they can fill them out and steal your identity.

4) If you use a computer, install good firewall and antivirus protection system and update it religiously. Better yet, take a course in safe computing at your local college or community center. You will learn many good tips for keeping all your information safe while you are online.

5) Never buy anything online from a company you do not trust of from a company that does not have encryption technology and a good privacy policy.

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