I have a poor credit report. What should I know about credit repair companies?

Question: 
I have a very poor credit report. I keep seeing advertisements for credit repair services that claim they can fix it. What should I know about credit repair companies?
Answer: 

In Ontario, the provincial Consumer Reporting Act says what may be included in a credit report. If your credit report is accurate (meaning that it does not contain any errors and it includes only items permitted under the Consumer Reporting Act), there is little that a credit repair agency can do to improve your credit report. Credit repair agencies cannot remove unfavourable but accurate information from your report.That information will stay in your report for as long as permitted under the law. A repair agency cannot improve your credit score if it is based on an accurate credit record.  Generally speaking, a credit repair agency does not have the power to do anything that you cannot do yourself.

If you do decide to hire a credit repair agency, they must give you a written agreement that itemizes the services and goods they will supply, when they are going to start and when they are going to complete their services, and the total amount you will be charged. A credit repair agency may not demand advance payment, or any payment at all unless its services result in a material improvement to your credit report.

More information about credit repair and credit repair agencies can be found at Important Tips on Credit Repairers produced by Ontario Ministry of Consumer Services.  You can also learn more from our webinar, Consumer Reporting and Credit Reporting, beginning at the 7:41 mark.

This Common Question was prepared by Community Law School (Sarnia-Lambton) Inc. in partnership with Your Legal Rights, a project of CLEO.

Resource notes: 

For information specific to credit repair agencies, go to the 7:41 mark.

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