Beware the Credit "Fix"

Q: I am in the process of getting a divorce, and I want to rebuild my credit [score]. It's very low. And, I don't know where to start. I want to use a credit agency, but I am not sure. I have heard that it's best to use nonprofits; but I never hear that they get the results like the other agencies. Can you please help me?

A: If by credit agency you mean an outfit that promises it can "fix" your credit, I would run away fast from such a company. Nobody can fix information on your credit report that is correct. If you paid bills late or defaulted on debts, you can make that go away. Many of these companies make claims that they can improve your credit rating, but really they are just scams, out to get your money. The truth is the truth.

Now, if you mean you need help coming up with a debt management plan, then you could get help from a nonprofit by going to the National Foundation for Credit Counseling's Web site. And yes, you should work with a nonprofit that charges nominal fees to help get you on a plan to pay back your debts.

Finally, if your main goal is just to improve the bad credit that is legitimately yours, the best way to do that is to pay your bills on time, going forward. So much of your credit score is based on just paying your bills on time. Over time, if you pay your bills on time, your credit scores will go up.