Truths About Debt Restoration Services

Although well intended, with so much information circulating the internet pertaining to debt restoration services, good and bad, it is no wonder that so many consumers are confused.  If you have faced a financial challenge that had a negative effect on your credit report and you need help, you may be one of the individuals trying to sort through the good and bad to find the truth.  Of course, one method for cleaning up a bad credit report is by going through the process manually but if your report is in serious trouble, you are limited on time to dedicate to the process, or you si

Although well intended, with so much information circulating the internet pertaining to debt restoration services, good and bad, it is no wonder that so many consumers are confused.  If you have faced a financial challenge that had a negative effect on your credit report and you need help, you may be one of the individuals trying to sort through the good and bad to find the truth.  Of course, one method for cleaning up a bad credit report is by going through the process manually but if your report is in serious trouble, you are limited on time to dedicate to the process, or you simply do not understand all the ins and outs, you might wonder if a debt restoration service is a viable solution.

The purpose of using a debt restoration service is to get help in removing damaging information from your credit report so ultimately, the three-digit FICO score improves.  While hiring a service such as this might seem like an easy choice, the problem is that along with many honest companies working on your behalf, more dishonest companies exist.  Making this even more disheartening is that the companies not being on the up and up are sneaky about taking advantage of people in your position.

An example is bad debt restoration services using marketing that sounds like the perfect solution for getting your credit report in better shape.  In this case, you might see services being promoted as “Guaranteed credit report clean up”, “We promise to get all negative reporting removed”, or “Complete credit report repair.”  The reason you need to be careful is that debt restoration services that use phrases like these are making a promise they cannot keep.  The truth is that some items such as a bankruptcy, judgment, or tax lien has to remain as a reported item for a specified amount of time so regardless of what the restoration service says or does, the information would not be removed.

Most financial experts would tell you to avoid all debt restoration services but it is important to know that some companies are owned and operated by hard-working, honest people who truly want to help.  Obviously, the key becomes separating the good from the bad.  Once an honest company has been identified by conducting research, asking other people, and looking at reports through the Better Business Bureau, the company of choice would be able to help with a number of negative things being reported.

In addition to assisting with your credit report cleanup, a good debt restoration service would provide some level of financial counseling.  Of course, it is possible that your credit report is in its current shape due to things you had no control over such as divorce, death of a spouse, serious illness, employment layoff, etc.  However, whether something you did or not, going through financial counseling would provide helpful information on how getting into this situation again could be prevented.

Depending on the company providing the debt restoration services, they may also be setup to work as a mediator between you and your creditors.  In this case, a representative from the company would negotiate with creditors on your behalf in getting balances reduced, monthly payments lowered, interest modified and so on.  Often, with a service such as this, the creditor may agree to hold off reporting something negative that would have otherwise been placed on your credit report, thereby reducing your credit score.  Again, you want to take your time finding the right company so if you use debt restoration services, it would be beneficial and not cause additional problems.