Let's say you're the type of person who's constantly in debt, and what's worse, you find it difficult to repay those debts. Or perhaps you've declared personal bankruptcy once too often. Or maybe you've been a victim of credit card fraud and found that your credit report has been adversely affected because of this. You're at your wit's end and are uncertain about what you should do. Can a credit repair company fix all these problems?

Sadly, the answer seems to be a big and resounding no. The majority of financial experts all seem to agree that one would be better off doing the legwork in attempting to repair his or her credit rather than paying a third party to do the fixing for him or her. Despite what most of them claim, a credit repair company can't just wave a wand and make all your credit problems disappear like magic. If, however, there are inaccurate statements in your credit report, a credit repair company can help you. For a fee, representatives of the company will contact your creditors on your behalf to get errors in your credit report fixed. But then, this is something you can always do by easily yourself, so it isn't advisable to spend money that you could use to repay part of the debts you have.

What you should be wary of are credit repair companies that promise to remove any and all blemishes in your credit report; even if these blemishes are verifiable, accurate, and not obsolete. If you really do have bad credit, not even the most popular credit repair companies can do anything about it. If any such company promises to fix your credit no matter how bad it may be and especially if the information in your credit report is correct, stay away from them. Most likely, they will use unsavory or downright illegal methods to accomplish this and your personal credit will be ruined.

One tactic they use is this: they will contact your creditors or credit bureaus and claim that the data in your credit report is inaccurate. Your creditors will naturally investigate these claims and while they are doing so, they will remove the "bad" information from your credit report. Meanwhile, you mistakenly believe that all bad credit information is removed from your report and are happy with the way things are going. True, if credit reporting agencies cannot verify the truth of an entry within 60 days, the offending data may be deleted from your report. But after your creditors finish their investigation and find the information to be accurate after all, the unfavorable data will be returned to your credit report - leaving you in the same boat you were in before, or even worse.

Take for instance two such companies: ICR Services Inc. and National Credit Education and Review. They were charged with fraud by the U.S. Federal Trade Commission (FTC) in 2003 for promising the impossible to consumers; they falsely claimed that they had a computer disk that could free a person's credit report from notations of late payments, foreclosures, bankruptcies, and the like. Of course, such a disk did not even exist. These two companies did not admit to any guilt, but settled their case for $1.15 million.

So if a person needs to fix his or her credit status and wants to avail of the services of credit repair companies, what should he or she do? Well, you surely wouldn't be helping the state of your personal credit any if you just go by the seat of your pants and hire the first credit repair firm you find on the Internet. First, you should make sure of your rights as a consumer under the Credit Repair Organizations Act by reading the booklet "Consumer Credit File Rights under State and Federal Law." Find a reputable credit repair organization by contacting the Better Business Bureau and make sure that the organization you're planning to hire clearly sets out in print the services they will be providing, the length of time it will take to accomplish what you're hiring them to do, and a justification of the fees they'll be charging.

Using a credit repair company to improve your credit rating is not your best bet; it's not even a good bet at all, according to the experts. Remember that erase information in your credit report if that information is true and not out-of-date. Hiring one for that purpose would just be a waste of money.

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