Q: I have been involved with a non-profit credit repair company for two years. Recently, I went to buy a car that cost less than $10,000. I was denied because “closed by credit grantor” was written on my credit report next to two credit cards whose balances are under $1,500.

I was told it will take 7 years to get this negative information off of my credit report. I have a perfect credit report other than that. Please explain to me the good in using a credit repair company?

A: Using a non-profit credit repair and budgeting company to assist you in negotiating with your creditors and consolidating your bills is an okay choice if you’re weighing bankruptcy.

The non-profit companies typically provide free or low cost budgeting advice, help that is not reported on your credit history. However, if you enroll in their program to pay off your bills, it ends up as a major mark on your credit history. The consequences of your involvement with the bill-paying program should have been explained to you before you enrolled in their pay-off program.

About a year after you finish this company’s pay-back program, you should be able to improve your credit enough to qualify for a car loan.

Published: Mar 1, 2001