Need help managing debt? Here are some tips.


The CFPB suggests starting with a free credit report

One of the few good things that COVID-19 did for consumers is that we held off on our credit card spending. However, when we came out of the pandemic, we lost our minds and accumulated so much debt that balances on credit cards and other revolving credit products are now over the $1 trillion mark.

When consumers get into credit trouble, they tend to either hunker down and start chipping away at the issue piece by piece or hand all their woes over to a credit repair company that can do all the legwork and get things back to normal.

The Consumer Financial Protection Bureau (CFPB) says that when a consumer goes the credit repair route, they have the rights they need to be aware of.

The biggest one being is that you have the right to see results before you pay. The CFPB cautions consumers to resist any “promises” that a credit repair service makes, no matter how trapped you may feel.

The agency says that the people working to improve their credit situations can feel trapped. Some companies use this stressful situation to take advantage of consumers by selling a promise of credit repair services. However, these services often charge fees without delivering on their promises.

“Under federal law, when a company uses telemarketing to sell credit repair services, they have to meet certain requirements before they can charge for their services,” is how the CFPB lays out the rules.

“First, the company must achieve the results it promised you within the time frame they stated. Second, the company must give you a consumer report showing the results, and the report must be generated more than six months after the results were claimed to have been achieved. Only then can the company charge you fees or accept your payment.”

Credit repair isn’t always necessary

ConsumerAffairs Senior Finance Writer Ashley Eneriz says that while many credit repair companies offer free credit counseling, most recommend enrolling in a paid debt management program to improve your credit and finances. 

“These programs can be helpful, but they can also take 12 to 36 months to complete, which adds up quickly when you are paying a monthly fee,” she said.

“The biggest thing to consider is if the cost of credit repair is worth the benefits. For many individuals, you can repair your credit yourself by paying more towards your revolving credit debts such as your credit cards.

"Establishing a history of on-time payments and tackling your debt are the number one way to improve your credit score, but it is not an overnight fix. For some, it might take over a year to see significant improvement.”

ConsumerAffairs has resources to help you get out of debt here.

The CFPB agrees with Eneriz and suggests that before you sign up with a credit repair service, you should order a credit report (they’re free) and, if you see mistakes, dispute them (again, free). 

To obtain your free credit report from the three nationwide credit reporting companies, visit The credit reports you receive each week are free and available online. Then, if you see anything that’s not completely wrong or just not “quite” right, use the CFPB’s sample letters and answers to common questions to help with resolving problems. Or just watch this video.

“Errors can be investigated and resolved, but credit repair companies cannot legally get information removed if it is accurate and timely,” the agency was careful to add, so you need to know that in advance if you go to a credit repair company asking for help.

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