Some businesses promise to erase all of a consumer's bad credit history for a fee so that they can finally purchase a car or get a home loan. Generally speaking, there is nothing that a credit repair company can do for consumers that consumers cannot do themselves. No one can legally remove accurate and timely negative information from a credit report. Only time and effort will improve your credit report. There are, however, reputable companies and non-profit organizations who assist consumers in their efforts to help improve their credit.
The Federal Credit Repair Organizations Act (CROA) and the Tennessee Credit Services Businesses Act of 1988 regulate these types of businesses. The Federal law requires that credit repair agencies give consumers a written disclosure explaining their legal rights about credit history before the consumer signs a contract. Also, credit repair agencies must provide a written contract detailing the services and costs before performing any services. In Tennessee, all credit services businesses must be licensed by the Department of Commerce and Insurance; it is unlawful for any company offering these services to charge the consumer for the "repair" services prior to full and complete performance of the services.
Many credit repair companies charge for services that consumers can perform themselves for free, such as removing inaccurate information from a credit report. Unfortunately, many credit repair companies promise to erase all negative credit history. In reality, only time can erase negative information. Through diligent, timely repayment efforts, consumers can improve their credit ratings or scores.