The Financial and Consumer Services Commission of New Brunswick (Commission) urges consumers to be cautious of companies that promise to improve credit scores or erase negative information from credit reports.
Some companies may make offers that sound appealing, especially to consumers concerned about their credit history. Some also sell courses that claim to teach consumers how to repair or improve their credit. Consumers should know that accurate information on a credit report generally cannot be removed simply because it affects a credit score. Building or rebuilding credit takes time and consistent financial habits.
Consumers should also know that they don’t need to hire a credit repair company to improve their credit. Many of the services these companies charge for are things consumers can do themselves for free.
What to know about credit repair companies
Credit repair companies charge a fee for services or goods intended to improve a consumer’s credit report or credit rating. They are not regulated, approved, registered or licensed by the Commission. However, the Credit Reporting Services Act includes provisions that credit repair companies must follow:
- A credit repair company cannot guarantee results.
- A credit repair company cannot take payment upfront. It can only charge you after it has made a material improvement to your credit report or credit score.
- A credit repair company must give you a 10-day cooling-off period to cancel a credit repair agreement after you receive it.
- If an agreement is cancelled, the credit repair company must provide a refund within 15 days.
Before signing an agreement with a credit repair company or any company offering to help you improve your credit score, ask questions and check sources before committing to any agreements. Be wary of promises of fast results. There is no quick fix for credit.
Improving credit usually takes steady habits over time, such as making payments on time, keeping credit use manageable and limiting unnecessary credit applications.
Steps consumers can take
Before paying for credit repair help, New Brunswickers can take the following free steps to improve, understand and protect their credit:
- Ensure minimum monthly payments are being made on credit products.
- Request a free copy of their credit report from a credit reporting agency, such as Equifax and TransUnion.
- Check that personal information, accounts, balances, payment history and collection items are accurate.
- Look for accounts or inquiries they do not recognize.
- Dispute incorrect or outdated information with the credit reporting agency.
- Contact the lender, creditor or collection agency directly if the incorrect or outdated information is about an account, payment or collection matter.
- Keep records of letters, emails, screenshots and dates of correspondence with the credit reporting agency, lender, creditor or collection agency.
- Understand their rights and protections and the importance of checking their sources before committing to any agreements.
Under the Credit Reporting Services Act, the Commission licenses and regulates credit reporting agencies in New Brunswick to ensure they follow fair practices.
The Commission does not administer credit reports or credit scores, correct information in a credit file, act as an intermediary with credit bureaus or collection agencies, or repair credit on behalf of consumers. For more information on what the Commission can and cannot do, visit Credit Reporting.
If a company promises a quick fix, guarantees results or asks for payment before improving your credit report or score, take time to ask more questions before signing. Consumers can visit Finfo.ca for easy-to-understand information about credit reporting and credit repair, including the Credit Report Myth-Buster Quiz and other resources.