When you have suffered from bad credit the last thing you want to do is suffer more from the wrong type of credit repair. Some companies or lawyers will charge you for credit repair, but fail to deliver permanent results. Instead, you might find those discharged debts back on your report even though the Fair Credit Act states they are to be removed permanently when the debts are over four years old. Most credit bureaus will remove anything that is older than three years especially if it can have a damaging effect on your credit scores. Before discussing companies that provide services for debt consolidation it is best to understand the credit bureaus and how reports are made.
Any long term credit such as credit cards, student loans, mortgages, personal loans, and even some utilities will report to the credit agencies. They can report that you have good standing with them or not. There are sometimes degrees to the reporting such as how many months you might have missed or made a late payment in which case the standing is not good, but you might not be in default standing either. The more you miss payments the worse your standing with the creditor is and therefore the worse your credit history looks. Your credit history is taken into account to determine your credit scores. Each bureau has their own credit score and then there are the FICO scores.
These scores can be calculated differently, which is why a bank may say you have lower scores than what you accessed online via your free credit report.
The main focus in any credit score is based on your risk. A risky situation is one where the person has defaulted, missed or made late payments constantly. When you are undergoing credit repair it is imperative that you do not make any late payments, missed payments, or have defaults on your history. There are some specific issues like a bankruptcy that will stay on your credit report for seven years before you can have it taken off. All other issues such as a closed account where you paid off the credit card in a settlement can be removed after three to four years. You do want to remove any bad elements on your credit report because these are dragging your credit scores down.
It is better to have very little credit showing with good scores than to have bad records bringing your credit scores down. In other words, you should have only the good credit showing on your reports. It does take time for your scores to be repaired. There are other options you can use to get your repaired credit. For instance pre-paid credit cards work great for helping you show a good history without having the potential of getting into debt again. If you need credit repair it is a good idea to read reviews about the different companies offering this solution to make certain you have the best one on your side.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.