When you’re on the verge of purchasing a new house, car, or even a cell phone, only to be stopped because of bad credit, it can be frustrating to say the least. How do you recover from a low credit score quick enough that it doesn’t interfere with your life plans? Unfortunately, repairing your credit can be a long, difficult process.
One option you may choose to get your credit back on track could be to hire a credit repair company. After all, they are experts, and it is certainly less hassle than doing it yourself. But what do credit repair companies even do? How is their process any different than what you could do yourself?
Table of Contents
- 1 How Do Credit Repair Companies Repair People’s Credit?
- 2 Are Credit Repair Companies Worth It?
- 3 How Long Will It Take to Repair My Credit?
- 4 Finding and Verifying a Legitimate Credit Repair Company
How Do Credit Repair Companies Repair People’s Credit?
Enlisting the help of a credit repair company is a smart move for your future, but it’s only natural to wonder what you’re paying for. After all, you wouldn’t just pay a mechanic to “fix your car,” you’d want to know what they did to fix it, and how they spent the time you are being billed for, even if you don’t understand every step of the process.
Essentially, credit repair companies will find any derogatory marks on your public record, verify if they are reported accurately, and help to get them off your record if not. While the specific tactics that your credit repair company uses will depend partially on your unique situation, there are a few things almost always included as part of the repair process.
Reviewing Your Credit History
Credit repair companies will typically get your credit report from the three major credit bureaus: Equifax, Experian, and TransUnion. CreditRepair.com actually has a relationship with TransUnion, making both the acquisition and negotiation of your credit report faster and smoother.
Credit repair companies then compare the three credit reports and look for any discrepancies or errors. Because of the way that credit is calculated, you might have an error on one report and not another.
Disputing Reporting Mistakes
After analyzing your credit reports, they will decide how to best dispute any inaccurate charges. While you can use our letter templates to do it yourself, credit repair companies know exactly what sort of proof is needed to validate or contest a charge, as well as the laws surrounding credit reporting.
Since complex legal issues are common when disputing charges, it helps to have some legal experts around, and that’s exactly the approach that Lexington Law, a credit repair company run by lawyers, takes. Especially if you’re the victim of identity theft, this specialized knowledge can really come in handy.
It can be very difficult to prove a negative: that you didn’t buy those plane tickets, hotel rooms, or extravagant sports cars. Credit repair companies know how to work around that and advocate for you.
Additionally, credit repair companies know which charges are affecting your credit the most, and will try to tackle those issues first. Some debts are weighted differently than others, or others might be in violation of laws you didn’t even know existed (like the Fair Credit Billing Act). This can help expedite the impact of repairing your credit, so you see the positive results a little sooner.
Are Credit Repair Companies Worth It?
Besides knowledge and expertise, what do credit repair companies provide that you couldn’t do yourself? Although you shouldn’t underestimate the value of professional experience, you could theoretically take similar steps that a credit repair company would in disputing your credit, just as you could fix your own plumbing or computer. Experts just tend to do a more thorough job from the outset.
However, many of the top credit repair companies provide an interactive report of your credit progress. This helps you not only track their progress, but saves you from having to continuously request credit reports yourself.
Additionally, they can provide you with identity theft protection, as well as education on how to best build your credit going forward. Some companies, like the Credit Pros, will even find ways to remove a charge from public record entirely, whenever possible.
Everyone wants to know what they’re paying for. This is one area of life where surprises are not appreciated, especially when dealing with something as impactful as your credit score.
Although it takes years to gain the working knowledge that a credit repair company has, just knowing the basics of what they do can take a lot of the mystery out of the equation and help you feel a little more secure. You’ll feel a lot better with a solid credit score under your feet, but that’ll take time and expertise. However, a secure financial future is well worth the investment.
How Much Do Credit Repair Companies Cost?
The cost of repairing your credit will depend on which company you choose and which services are attached. However, a credit repair company will charge roughly $20 to $150 a month for their assistance. Wherever prices fall in this range will depend on the extra features offered by the credit repair service.
Most credit repair companies will find negative items on your credit report and contest them if necessary. Prices can go up if you opt into services such as credit score coaching, credit report monitoring, and identity theft protection. Some companies may also offer their own unique services tailored to your specific credit repair needs.
Is It Worth Paying Someone to Fix Your Credit?
There is virtually nothing a credit repair company will do that you cannot do yourself. If you don’t have the time but do have the money, you may hire a credit repair company to get your credit score back into shape.
Additionally, if you pay more for credit monitoring and updates, you’ll know which way your credit score is trending at all times — saving you the time of having to continually check for yourself. However, if your credit score is affecting your ability to stay on top of your finances and/or get a loan, you may be adding to your debt by taking on another monthly bill you cannot pay.
How Long Will It Take to Repair My Credit?
In most cases, you’ll see improvement to your credit score within anywhere from six months to a year. This timeline assumes that you handle every debt, negative mark, and inaccuracy right away. It is important to know that there is no quick fix for improving your credit score, but there are a number of things you can start doing today to repair and raise your credit score for the future.
Finding and Verifying a Legitimate Credit Repair Company
First, you need to differentiate scammy companies from legitimate ones. The best credit repair companies will follow the Credit Repair Organizations Act (CROA), which requires them to do the following:
- Disclose the total cost of their services.
- Only accept payment after fulfillment of contract.
- Give you three days to cancel your contract.
- Never advise you to commit credit fraud.
If any credit repair service doesn’t follow these rules, then they’re not a legitimate credit repair company. It is easy to see how some players in this industry could be running a scam; people who are willing to pay to improve their credit are often desperate for a quick fix.
However, legitimate credit repair companies do exist, and they don’t have to resort to shady or misleading tactics to help you fix financial mistakes.
For more information on credit scores and how you can improve yours, visit the Fiscal Tiger credit score resource and learning center.
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