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How credit repair companies work to get results when it comes to fixing your credit.
When repairing your credit, it’s possible to go it alone, searching through credit reports line by line for incorrect information and then filing disputes on your own. It’s far less of a headache to hire a credit repair company to do all the legwork for you. Find out why it can be advantageous to hire a credit repair company, and how legitimate companies go the extra mile to fix your credit report.
When a credit repair company begins working for you, they immediately pull your credit report from all three credit bureaus (Equifax, Experian, and TransUnion). During a free consultation, a credit specialist will review your report with you to see if they’d be able to help you. If you have negative information that could be contributing to a bad credit score, then you’re a good candidate for credit pair.
Then the team reviews your reports in detail to identify potential mistakes and errors. This can take a few days to complete, as they look for mistakes in the credit history, duplicate accounts and expired negative items.
If they identify errors on any of your reports, they’ll collect any documentation that you have, which will support your dispute. Once they have the documentation, they send it to the three bureaus and work with them to determine if the item or items should be removed from your credit report.
The best credit repair companies review all three reports from each of the three bureaus because they might not all contain the same information. Each credit reporting agency has its own “data furnishers.” That’s what industry experts call banks, credit unions, savings and loan institutions, mortgage lenders, and credit card issuers. If the company does not review all three reports, errors could be missed.
To be clear, there’s nothing that credit repair companies do that you can’t do on your own. Everything a credit repair company can do for you, you can do yourself at no cost. However, doing the work on your own can be a lot of work. You also may not have as much success making disputes yourself, which means negative information may remain and continue impacting your score. Hiring a professional credit repair service often increases your chances for success.
In a word, yes. These companies employ attorneys that are licensed to work in many states, or only provide services in one state. These attorneys understand the nuances of the trade and the law. Their experience makes them more effective when they’re disputing negative information on your behalf. These attorneys also apply provisions within federal consumer protection laws to help you improve your credit history.
The best credit repair companies will help you to:
But let’s make one thing clear: credit repair may or may not improve a bad score. If you have negative information in your credit reports that is accurate, there is nothing a credit repair company (or you) will be able to do legally to remove it. So, if negative items are correct, you’ll need to rebuild your credit rather than repair it.
You hire these companies with the idea that they will delete any mistakes on your credit report. And unfortunately, such mistakes can be numerous. A congressionally mandated study found that one in five consumers had an error on at least one of their three credit reports. Howard Shelanski, Director of the Federal Trade Commission’s Bureau of Economics, says, “These are eye-opening numbers for American consumers. The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”
The study also found that one in four consumers had errors that could negatively impact their credit score.
You may have decided that you’d rather employ a credit repair company instead of taking the free credit repair option and doing all the work yourself. But you have questions. How can you tell if a business is legitimate or some front for a scam artist? Are these services affordable? Let’s find out.
Five steps the best credit repair companies won’t take
There are certain things you should be looking for when investigating credit repair companies and scammers. Legitimate companies won’t do the following five things:
If you recognize these red flags, or if the company promises that it can increase your credit score by 100 points or more, it’s a sign they’re running a scam. If you spot a scam, you can report it to the State Attorney General or the Federal Trade Commission.
Here’s a quick fact for you: The Better Business Bureau (BBB) rarely accredits credit repair companies due to concerns about high instances of fraud in the industry. Only the best get the BBB seal of approval.
A credit repair company’s rate really depends on the services you require or request. A comprehensive program may provide services that include:
For this package, you could be paying anywhere from $30 to $100 per month, with a setup fee ranging from $15 to $90. The cheapest credit repair cost occurs when you fix your credit yourself. That option costs around $30, but you do all the time-consuming work yourself.
Software for guidance on credit repair begins at $30, but you don’t get much for your money. More comprehensive software packages range from $199 to $399, and these platforms often set alerts to track dispute progress and sometimes lead you to certain templates to use; they can even autofill those templates in some cases.
Before you sign or buy anything, read the contract and ask questions about the rates and services. Offers that sound too good are usually trouble.
Getting your credit report and checking it for errors should be on your to-do list. If you don’t check your credit report, these errors could stay for years and lower your credit score. This will make getting loans or a credit card with affordable rates nearly impossible. Now that you know how to spot a legitimate credit repair company from a scammer, don’t hesitate any longer: contact a credit repair company today. These companies could make the difference between healthy credit history and one plagued with negative information.
Article last modified on October 30, 2019. Published by Debt.com, LLC
DISCLAIMER: Debt.com does not provide credit oriented services, but, upon request, acts as a locator service for BBB registered companies. Such credit report resolution specialists will not remove any derogatory information (defined as accurate negative information appearing on a Client’s credit report that actually belongs there), nor will such credit report resolution specialists assist you on improving your credit rating. Instead, as Credit Repair Organization Act compliant companies, such credit report resolution specialists will solely assist you in removing or correcting inaccurate information appearing on your credit reports. While Debt.com endeavors to connect individuals and families with appropriate professionals and resources, individual situations and results will vary from person to person. It is ultimately up to you to determine whether the companies that we may introduce you to are appropriate for your situation.
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