Credit Repair Companies

In these times of increased financial difficulties, there seems to have been a huge increase in the number of companies who promise that they can remove or change information held by credit reference agencies, thus repairing your credit report and enabling you to successfully apply for more credit. Some companies may even claim that they can delete county court judgments (CCJs) from your credit file.

Whilst there are many credit repair companies that can help you to work through to update and improve your credit report, you should be very wary of any company that promises a quick fix. Information can only be removed from your credit report if it is incorrect. For example, CCJs or Scottish decrees must stay on a credit report for 6 years, unless the amount owed is paid within 1 month of the judgment being issued. The judgement may also be removed if you genuinely haven't received the relevant court summons (known as a claim form). However, even if this is the case, the summons will most probably be served again, which will merely extend the time that the CCJ remains on your record. In addition, if you apply to the county court to set aside a CCJ or decree without a genuine reason to do so, then you could land yourself in trouble with the court.

In October 2008, credit repair services became required to be licensed by the Office of Fair Trading (OFT), and as a result, many disreputable companies closed down.

How to Choose a Credit Repair Company

  • Check that the credit repair agency has a consumer credit licence from the Office of Fair Trading (OFT) before using their services.
  • Ignore any credit repair company that tries to drum up business through spam emails; no reputable company will do this. Likewise, companies that ask you to call premium phone numbers should also be avoided.
  • Avoid any company that promises to instantly erase your bad credit history; although steps can be taken to improve your credit record, this is a slow, steady process.
  • Be wary of credit repair companies that offer you a loan to improve your credit rating; make sure you read the small print regarding interest rates. Some loans may be offered at an exorbitant APR (in some cases over 150%), making repayments virtually impossible. Other credit repair companies may offer you a credit card, usually also with a high APR; however, if you are prepared to spend only a small amount on it each month and pay it off straightaway, this may help to improve your credit record without getting stung by high interest charges.
  • Avoid credit repair companies that ask for a fee to be paid upfront for their services; no reputable organisation will do this.
  • NEVER accept the advice of a credit repair company that suggests that you lie in order to improve your credit record, for example, by providing false information on a credit application, or by telling the court that you did not receive your county court claim form. Providing false information is a crime and you can be prosecuted for it.

If you are not happy with a credit repair company, you can make a complaint to your local trading standards department.