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The Mystery Behind the Credit Repair Industry

Credit repair services have existed for decades, yet there is still confusion amongst consumers as to what these services actually entail.

 
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San Francisco, CA -- (SBWIRE) -- 05/21/2014 -- Despite having been around for decades, there are still common misconceptions regarding what credit repair services actually do. There are hundreds of different credit repair services, but consumers still do not completely understand what a credit repair company provides to their clients.

Credit repair is a service where credit consultants identify erroneous items on a client's credit report and dispute those items with the credit bureaus to fix those mistakes. When these negative items have been removed, the clients' credit scores will likely increase. Most people in need of credit repair are those working on applying for a loan or other financial assistance.

BestCreditRepairCompanys.com (BCRC) conducted their own survey and found that a majority of responders believe that a credit repair company reduces or settles debt. Only 32.1% of consumers polled across the United States actually understood what a credit repair service does.

"Debt settlement and credit repair are two totally different industries, but since they are both financial assistance type of services, there is confusion," Carlie McKeon, BCRC PR Director. "Only a third of responders understood the credit repair process, which means there is an opportunity for a credit repair service to step it up and educate the masses.

Another 13.6% of responders believe that credit repair companies exist to help their clients apply for a loan. While credit repair companies can help their clients improve their credit scores by removing erroneous, negative items from a credit report and improving credit scores, they do not actually assist in the loan application process.

Another 9.3% of consumers thought that credit repair services assist in filing for bankruptcy while another 7.4% of consumers believed that credit repair helps clients apply for a credit card.

"The credit repair industry needs to be doing a better job with helping consumers understand what their service entails," McKeon stated. "If only 32.1% of responders actually know what a credit repair company does, then there is still a large portion of the population unaware that there is help available to them."

To view a list of credit repair companies and reviews, visit BCRC.