Bankruptcies increased 43% in 2008. While this is in part due to the financial downturn that accelerated at the end of 2008, it also represents a trend of increased bankruptcy filings even though new reforms in who can file were put into place in late 2005. As result, a whole industry of credit repair businesses has sprung to life. And while their claims are seductive to those mired in debt and desperate for a solution, proceed carefully for this solution may not be what it seems. Colorado bankruptcy services maintain a list of credible credit counseling services.

According to the Better Business Bureau, complaints against credit repair companies rose 38% in 2004 and have been on a steady rise since then. Overblown claims of producing clean credit histories from dismal credit reports are tantalizing to those bogged down in defaults, late payments, foreclosures and bankruptcies on their records. But, in reality, these credit repair and credit counseling agencies do nothing for the debtor except take money they cannot afford and sometimes vanish into the night leaving no trace.

A credit repair company can do nothing for you you cannot do for yourself. The only way to remove negative items from your credit report is either for the item to age out (meaning that it automatically drops off your report after around 7 years) or you dispute the item to the credit bureau with proof the item in incorrect. Period. There are no other ways to remove negative items from a credit report.

So, what are the red flags that a company representing itself as a credit repair solution might not be on the level?

-- They want money up front. A lot of it. Never, never pay up front.
-- New Social Security Number. Some companies promise their customers new, clean Social Security Number. Don't believe it. It is virtually impossible to get a new Social Security Number and illegal to have more than one.
-- They want you to create an Employer ID. Some of these companies encourage their customers to create an employer ID number with the IRS instead of using their Social Security number to produce a "new" credit record. Don't do this either. Skirting the issue in this manner will only deepen your trouble.
-- Consumer rights. Any reputable company should provide you with a copy of your consumer rights and actions you can take for yourself.
-- Dispute all information. Some companies advise their customers to dispute all the information on their credit report. This is fraud and you may be subject to persecution. Contact Colorado bankruptcy services for a list of government approved credit counseling agencies.
-- The company recommends you not contact a credit bureau. This is absolutely your right and the right way to clean up your credit.

The National Foundation for Credit Counseling maintains a web page at www.nfcc.org or can be reached by phone at 1-800-388-2227. Their web page offers valuable information on credit counseling and advice for overwhelmed debtors. Through their resources, you can find a reputable credit counselor near you to answer further questions or contact Colorado bankruptcy services for further information.