Beware the Credit Repair Rip Off

Physician's Money Digest, August 2007, Volume 14, Issue 8

Do you or someone you love have a low credit score? Are you or they plagued by credit debt? It can be an overwhelming situation and you may be feeling vulnerable, at least that’s what some credit repair agencies are hoping. Some of these agencies are offering credit repair kits that claim to help you fix your credit. But these kits, like Suze Orman's FICO Kit, are coming under fire.

A recent class action suit against Fair Isaac of Minneapolis and Equifax Inc of Atlanta alleges the companies violated the Credit Repair Organization Act by collecting payment before rendering service and making misleading statements about their products. The suit was settled and the companies agreed to stop promoting their services by using words like "improving" or "boosting."

The problem with these kits is they offer basic credit repair information and advice that is widely found for free in other places, such as the Internet or nonprofit credit counseling agencies. People who are already low on cash and can hardly pay bills are paying for kits when a small amount of research could provide them with all they need to know for free. While these kits may not be expensive, paying for information that is basically free is a rip off.