Credit-repair companies promise to wipe away all your financial problems. Beware of promises that sound great but you know are wrong, such as improving your credit score. The Federal Trade Commission says don't believe a company can erase your bad credit without any effort on your part, or that a company can remove liens or other judgments from your record. A credit-repair company is an obvious scam if it asks for money upfront, neglects to inform you of your rights, doesn't tell you that everything it can legally "do" can be done without its help, or tells you to dispute everything on your record regardless of its accuracy. Beware of the most serious credit-repair scam that promise:giving you a new identity. That one makes you a criminal as well.

On the Other: Credit Counselors Help

Credit counselors can, and will, give you the information you need to help you get through your problems. Credit repair will be a lot of work on your part no matter if you struggle through it alone, or seek help from a reputable credit counselor.

Bottom Line

Many credit-repair companies offer big promises with no effort. At best, they are out to bilk you out of more of your money. At worst, they engage in illegal activities. Know the difference between a credit counselor and a credit-repair company. Counselors can help, but credit repair is usually a scam.

Source:

Federal Trade Commission: Credit Repair: How to Help Yourself

Credit.com: The Truth About Credit Repair