I had very good credit but went through a series of jobs, some I got laid off from or fired from and as a result I fell behind on credit payments, several charge offs. I do have an existing auto loan. I haven't been able to make the payments on the charge off because my income isn't strong enough so I gave up basically. I'm in IT and I'm employed part time. I can't leave my job because I don't have another offer. So, for the time being I was wondering, are there any companies that are reputable that can work with you to repair your credit. I'm referring to credit repair agencies because quite frankly I can not stomach the thought of having to deal with creditors again.

P.S I thought about moving back with mom but the rent I pay right now is so cheap that if I move out I'm going to miss out on a real good deal, $600 a month to share a house in a very good location (45 minutes from NYC) but it's the choice is still on the table

  • 13
    How do you expect them to "repair"? Most of these "agencies" are essentially scams one way or another.
    – littleadv
    Commented Apr 27, 2016 at 16:44
  • 7
    Unless the "repair" is a bankruptcy filing all the agency does is middleman a negotiation. It won't stop the calls or collection efforts.
    – quid
    Commented Apr 27, 2016 at 18:07
  • 17
    @quid and the last thing people need while catching up on bills? a middleman taking a cut.
    – WernerCD
    Commented Apr 27, 2016 at 21:22
  • 2
    @mike : see meta.stackexchange.com/help/merging-accounts if you've accidentally ended up with two accounts Commented Apr 28, 2016 at 17:49
  • 3
    Move home, clear your debt. Painful yes but short term and clears your bill, if you were/are a parent you would want your children to ask for help. Just do chores, cook, clean etc... and keep looking for jobs. Commented Apr 29, 2016 at 12:43

7 Answers 7


Repairing your credit takes time. Companies that offer to do it for you (for money) generally succeed mostly at getting money from you. Nonprofit agencies will help you with advice and encouragement and will not want money from you. They may be able to help you apply for a consolidation loan, but to be honest that is rarely the best first step.

Over time, you need to

  • stop accumulating debts (live within your means)
  • pay back all your debts, possibly with a consolidation loan that has a lower interest rate
  • get and pay off a small debt to prove that you can

The last step may happen months or years after the first two.

  • 59
    if a person is paying 30% interest and each payment they manage to scrape up pays down only $5 of principal they will never get out of debt. In some cases a consolidation loan will let them get it paid down in a reasonable length of time. Note also " that is rarely the best first step" - for you to summarize this answer as "Get more debt" suggests you didn't read it fully. Commented Apr 27, 2016 at 17:08
  • 9
    Not my experience - credit cards you run up full are 30%. If you get a loan and keep the cards and run them full again, yeah, that's bad. But if you learn your lesson, pay them off and either close them or stop running them full, and live within your means while paying down the loan, you can live happily ever after. Keeping the credit cards open and paying that interest will make the whole thing take longer and cost more. Commented Apr 27, 2016 at 17:13
  • 8
    People are pretty passionate about their approach to debt. +1 from me on your answer. We don't always agree, but that's why it's "personal" finance. Commented Apr 27, 2016 at 17:35
  • 16
    Once all the old debt is gone, and the person spends only what they make, if they in fact swear off all debt forever, they will not have a good credit score. To get a good credit score (perhaps to buy a house), they will need to borrow a small amount that they can easily afford to pay back, and pay it back promptly with no late or missed payments. This will prove to lenders that they are a good risk. So yes, this is new debt, but not acquired until all the old debt is gone and the person has adjusted their spending and income to match each other indefinitely. Commented Apr 27, 2016 at 17:48
  • 4
    @snskedoc: At this time, optimizing credit rating should be the last thing in anyone's mind. If closing the cards removes temptation and makes becoming stable again easier, close the darn cards.
    – keshlam
    Commented Apr 29, 2016 at 19:26

My sister had a similar problem and went to an actual lawyer, not a "credit repair agency".

The lawyers settled her debt for a lot less than she owed, and she also got a bonus: one of the creditors called her repeatedly, even after her lawyers had told them not to.

The lawyers ended up getting her an extra $40,000. Combined with the debt settlement, she actually came out ahead.

Of course, her credit score went down, but it recovered in a couple of years.

  • 3
    +1 for seeing a lawyer, but settlements will torpedo your credit rating for a few years. If that's a hit you can afford to take, take it.
    – Ivan
    Commented Apr 27, 2016 at 23:28
  • Her credit actually got better after 2 years (since she was no longer delinquent on so many accounts), but individual circumstances vary.
    – user1731
    Commented Apr 28, 2016 at 0:22
  • How did the lawyer get an extra $40k? From suing the creditor?
    – Nelson
    Commented Apr 28, 2016 at 8:30
  • 12
    @Agent_L No, it would have been part of the credit protection laws (FDCPA). The creditor violated the law by harassing the creditee, and FDCPA can carry some significant penalty fees.
    – SnakeDoc
    Commented Apr 28, 2016 at 16:22
  • 5
    @Nelson SnakeDoc is correct. The attorneys settled with the creditor for violating the en.wikipedia.org/wiki/Telephone_Consumer_Protection_Act_of_1991 and similar laws -- this is $40K my sister actually GOT from the creditor, not just a reduction of the amount she owed (in addition to the $40K, the entire amount she owed was wiped out).
    – user1731
    Commented Apr 28, 2016 at 16:38

Don't use a "credit repair" agency. They are scams.

One of the myriad of ways in which they work is by setting you up with a bogus loan, which they will dutifully report you as paying on time. They'll pretend to be a used car dealer or some other credit-based merchant. For a time, this will actually work. This is called "false reporting."

The problem is, the data clearinghouses are not stupid and eventually realize some hole-in-the-wall "car dealer" with no cars on the lot (yes, they do physical inspections as part of the credentialing process, just sometimes they're a little slow about it) is reporting trade lines worth millions of dollars per year.

It's a major problem in the industry.

But eventually that business loses its fraudulent reporting ability, those trade lines get revoked, and your account gets flagged for a fraud investigation. The repair agency has your money, and you still don't have good credit. Bad news if this all goes down while you're trying to close on a house.

You're better off trying to settle your debts (usually for 50%) or declaring bankruptcy altogether. The latter isn't so bad if you're in a stable home, because you won't be able to get an apartment for a while, credit cards or a good deal on auto financing.

ED: I just saw what one agency was charging, and can tell you declaring bankruptcy costs only a few hundred dollars more than the repair agency and is 100% guaranteed to get you predictable results as long as you name all your debts up front and aren't getting reamed by student loans. And considering you can't stomach creditors-- well guess what, now you'll have a lawyer to deal with them for you.

Anything you accomplish through an agency will eventually be reversed because it's fraudulent. But through bankruptcy, your credit will start improving within two years, the tradeoff being that you won't be able to get a mortgage (at all) or apartment (easily) during that time-- so find a place to hunker down for a few years before you declare.


I've kind of been there myself. I stretched my finances for the deposit on a house, and lived off my credit card for a few months to build up what I was short on the deposit. Add some unexpected car repairs, and I ended up with £10k on the card. The problem I had then was that interest on the card ran at around 20%, and although I could meet the interest payments I couldn't clear the £10k.

I simply went and talked to my bank. In the UK there are some clear rules about banks giving customers a chance to restructure their debts. That's the BANK doing it, not some shady loan-shark. We went through my finances and established that in principle it was repayable. So I got a 2-year unsecured loan at around 5%, cleared the card, and spent the next 2 years paying off a loan that I could afford. My credit score is still aces.

Forget the loan-sharks. Talk to your bank. If they're crap, talk to another bank. If no bank is going to help you, consider bankrupcy as per advice above. Debt restructuring companies are ALWAYS a con, no exceptions.


So you are in IT, that is great news because you can earn a fabulous income. The part time is not great, but you can use this to your advantage. You can get another job or three to boost your income in the short term. In the long term you should be able to find a better paying job fairly easily.

There is one way to never deal with creditors again: never borrow money again. Its pretty damn simple and from the suggestions of your post you don't seem to be very good at handling credit. This would make you fairly normal. 78% of US households don't have $1000 saved. How are they going to handle a brake job/broken dryer/emergency room visit? Those things happen.

Cut your lifestyle to nothing, earn money and save it. Say you have 2000 saved up. Then a creditor calls saying you owe 5K. Tell me you are willing to settle for the 2K you have saved. If they don't, hang up. If they are willing getting it writing and pay by a method that insulates you from further charges.

Boom one out of the way and keep going. You will be 1099'd for some income, but it is a easy way to "earn" extra money.

This will all work if you commit yourself to never again borrowing money.

  • 5
    "from the suggestions of your post you don't seem to be very good at handling credit." He had good credit, never using credit is never living. Keeping your good credit score forever for the rainy day that never comes is pointless. The 2k in savings will cover it, especially if you keep it replenished. So I agree with you on one point, never borrow again and forget the game, but the other point: have credit, use it and manage it, if you mess up due to whatever circumstance, you get ask questions like OP's and see what available remedies there are.
    – CQM
    Commented Apr 27, 2016 at 20:37
  • 2
    That is very wishful thinking at this point, but it is much easier to get a loan with no credit then poor credit. Also given the pending changes from FICO on time utility payments may be enough to obtain a loan.
    – Pete B.
    Commented Apr 28, 2016 at 16:34
  • 2
    No credit means no history means high risk. Poor credit is actually easier to get a loan with vs. not having any credit. Sorry, but your advice is biased from your presumably high wages and no need for credit. This doesn't apply to the OP (he said IT, but it's doubtful he's doing what you do and earning your wages... keep this in mind). It actually doesn't apply for majority of folks. And settling your debt is about the worst thing you can do, unless it's absolutely hopeless. It will destroy your credit rating. Much better to get a consolidation loan at a lower interest and pay it off quicker.
    – SnakeDoc
    Commented Apr 28, 2016 at 17:03
  • 3
    You are mistaken @SnakeDoc.
    – Pete B.
    Commented Apr 28, 2016 at 17:08
  • 2
    It seems folks agree that you are mistaken (evidenced by your low upvotes). Your advice will damage the OP's rating further than it already is. Never borrowing money again is simply not realistic. So disregarding your rating is not good advice. Settlement is an awful thing to do... period, really.
    – SnakeDoc
    Commented Apr 28, 2016 at 17:14

Here's what my wife and I did.

First, we stopped using credit cards and got rid of all other expenses that we absolutely didn't need. A few examples: cable TV, home phone, high end internet - all shut off. We changed our cell phone plan to a cheap one and stopped going out to restaurants or bars. We also got rid of the cars that had payments on them and replaced them with ones we paid cash for. Probably the most painful thing for me was selling a 2 year old 'vette and replacing it with a 5 year old random 4 door.

Some people might tell you don't do this because older cars need repairs. Fact is, nearly all cars are going to need repairs. It's just a matter of whether you are also making payments on it when they need them and if you can discipline yourself enough to save up a bit to cover those.

After doing all this the only payments we had to make were for the house (plus electric/gas/water) and the debt we had accumulated. I'd say that if you have the option to move back into your parent's house then do it. Yes, it will suck for a while but you'll be able to pay everything off so much faster. Just make sure to help around the house.

Ignore the guys saying that this tanks your score and will make getting a house difficult. Although they are right that it will drop your score the fact is that you aren't in any position to make large purchases anyway and won't be for quite some time, so it really doesn't matter. Your number one goal is to dig yourself out of this hole, not engage in activity that will keep you in it.

Next, if you are only working part time then you need to do one of two things. Either get a full time job or go find a second part time one. The preference is obviously on the first, which you should be able to do in your spare time. If, for some reason, you don't have the tech skills necessary to do this then go find any part time job you can.

It took us about 3 years to finally pay everything (except the house) off - we owed a lot. During that time everything we bought was paid for in cash with the vast majority of our money going to pay off those accounts.

Once the final account was paid off, I did go ahead and get a credit card. I made very minor purchases on it - mostly just gas - and paid it off a few days before it was due each month. Every 4 months they increased my limit.

After around 18 months of using that one card my credit score was back in the 700+ range and with no debt other than the mortgage.

*note: I echo what others have said about "Credit Repair" companies. Anything they can do, you can too. It's a matter of cutting costs, living within your means and paying the bills. If the interest rates are killing you, then try to get a consolidation loan. If you can't do that then negotiate settlements with them, just get everything in writing prior to making a payment on it if you go this route. BTW, make sure you actually can't pay them before attempting to settle.

  • 1
    Well said. I would add to this, the credit score is simply a measure of how much money the bank can expect to make off of a loan that they give you based on past behaviors. Worry about your own finances, the bank has enough money without acquiring more of yours. I have not used debt of any sort in 10 years, and closed my last debt 7 years ago. Working as an IT consultant (like OP), lack of a credit score has not stopped me from purchasing anything (car, house, etc).The debt free lifestyle is what allowed me to make the transition from salary to irregular income with little disruption.
    – pojo-guy
    Commented Sep 6, 2017 at 3:47

I think you already have a lot of good ideas here. I also don't agree with going with a company to "repair" your credit. They don't have any secret method on how to do so anyway, it takes time and hard work.

  1. Cut out things that you are more luxury items. Cable for me is a must (Haha) but I can go without having HBO, showtime, etc. Make a list of the things you currently pay for and you will be able to see exactly what you can't "live without" and what you can live without.

  2. The good thing nowadays there's so many side gig options available! Check out this article here: https://www.learnvest.com/2017/06/this-is-how-much-you-could-make-through-airbnb-uber-and-7-other-popular-side-gigs. This goes into detail on how much you can make on these sites on a monthly average. Since you're in IT, you can use fiverr! I've used fiverr a lot of projects, you create your own deadlines, work schedule, you accept the jobs you want, similar to your UBer and Lyft but Fiverr has a lot of contractors with a variety of skills specifically in IT, lots of demand for web developers not sure what IT field you're in.

Hope this helps! Good luck!

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .