« Credit Tip: Learn to budget | Home | Get smart about your money »
Credit repair service has you do the work
By Adam | September 30, 2006
Here’s a summary of this article about a credit repair service:
People frequently justify spending a little more by saying, “You get what you pay for.”
So when you look at laying out money and come to the conclusion that you can’t tell if you’re getting what you’re paying for, there is little doubt that you’ve come face to face with a Stupid Investment of the Week.
And if you carefully check out the credit-repair service offered by AmericanCreditBuilder.com, it’s clear that you could come away so unsure of the potential results that it’s most likely not worth the effort.
The problem with this program is that you’ll be on the hook for services months before you have a clue if it actually works.
American Credit Builder helps members build their credit rating by making sure non-traditional payments are part of the mix.
Credit bureaus normally focus on charge cards and consumer loans, but American Credit Builder gets them to look at utility payments, rent and other regular expenses.
Reporting these payments to more than 175 credit bureaus is supposed to help establish a responsible credit history.
The service costs $24.95 a month, plus another $24.95 in set-up charges.
For that $300 a year, you get a free prepaid MasterCard with $10 loaded onto it, a free bill-paying service using that card, free credit-building tips and an e-book that provides a second helping of credit-building tips.
By paying phone, utility and other bills, either with the card or through the American Credit Builder bill-pay service, the consumer’s payment history is consolidated and reported.
For someone with a “thin” credit file or a lousy credit rating, those transactions create a history of regular payments.
In theory, this elevates the credit score, leading to better loans, which over time can recoup the $25 a month for the service.
Carl Saling, director of public relations for American Credit Builder, noted that there is no guarantee, or even a projection, of how much the service might improve a member’s credit rating.
“If you have issues with your credit currently, you also need to clean those up at the same time,” Saling said.
“You are cleaning your credit by doing the different techniques, and then we show them the payments you are making to help build new credit, and you can see a dramatic impact in six to nine months.”
Rather than being the credit-fixer that the Web site suggests, the program is more like a booster to other efforts an individual makes to build credit.
Even used that way, there are still concerns.
Fair Isaac, the leading provider of credit scores, and other firms are trying to make non-traditional payments a bigger factor in new and different credit-scoring measures.
-Adam
Credit-repair service has you do the work (Chicago Tribune)
People frequently justify spending a little more by saying, “You get what you pay for.” So when you look at laying out money and come to the conclusion that you can’t tell if you’re getting what you’re paying for, there is little doubt that you’ve come face to face with a Stupid Investment of the Week.
technorati tags:credit, American, credit, builder, bill-paying, service
Topics: Credit Repair, Credit Report, Fix bad credit, Repair your credit |