Do credit repair companies work?

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The short answer to this question is yes. Credit repair companies work to offer assistance and guidance to people beginning the credit repair process. And while many credit repair companies are trustworthy and safe to use, there are some scams out there that you should steer clear of. 

Credit repair companies can help you obtain a credit report, review it for errors, dispute legitimate errors and offer services like credit monitoring. Before picking a credit repair company, remember that legitimate companies will never guarantee that they can remove negative marks on your report. An error has to be true and fair in order to safely go through the dispute process.

All of these services combine professional and personal suggestions to assist you in maintaining or improving your credit. Continue to read about how credit repair companies work and find out if they’re right for you.

How do credit repair companies work?

Credit repair companies check and analyze your credit report, offering their services to help you improve your credit so you can feel secure and comfortable with your financial situation. These companies will gather your information, review your report for negative items, and recommend credit solutions. 

Many people turn to credit repair companies for help disputing errors on their credit report. If the negative item is illegitimate, the credit bureaus will remove the error from your report. However, if the disputed item in question is legitimate, the negative mark will stay on your report. 

Other popular services include credit monitoring. Credit monitoring is a safeguard that will keep an extra eye on all of your activity from the three credit bureaus (Experian^®, Equifax^® and TransUnion^®). Credit repair companies will notify you when someone opens a new account in your name, your personal information changes, a bankruptcy is filed and more.

How much do credit repair companies charge?

The cost of credit repair services depends on the company and your starting financial situation. If you’re working toward improving a low credit score, you may see higher costs due various services needed to potentially improve your score.   

There are multiple payment methods that each company may use, including flat fees, per month costs or per deletion costs. Some companies have different cost options like a basic, standard or advanced package.

Each of these options are intended to offer a variety of services for a variety of clients. Typical prices may range anywhere from $70 to $100 or more in per month costs. Understanding the severity of your situation and what you can afford will help you choose the appropriate payment plan and company. 

What should I consider when hiring a credit repair company?

You should keep cost, included services and reputation in mind when hiring a credit repair company.  

• Costs differ based on the plan you choose, services offered and the current state of your credit score.
• Included services can also sway your decision since some companies may not offer the help you need.
• Credibility is nonnegotiable, and you should read reviews to see if a company is legitimate.

How can I avoid scams?

The key to avoiding credit repair scams is understanding common red flags. A credit repair company may be a scam if they guarantee results, ask you to lie on applications, demand upfront payments and don’t explain your legal rights. 

Guaranteeing results

Guaranteeing results, like the removal of a negative item before they have viewed your credit report, is not a good sign. A negative item can only be removed if it is an error. Therefore, no one—including credit repair companies—can remove true and justified negative items on a credit report. 

Lying on applications 

Encouraging clients to lie on applications is a common sign of a scam. Meanwhile, legitimate credit repair companies require complete honesty and transparency from their clients. Lying on applications can lead to fines and, in cases of identity theft, prison. 

Upfront payments

Demanding upfront payments likely means you are involved in a scam. Trustworthy companies will obtain payment after their services are complete. This is one of the rules put in place by the Credit Repair Organizations Act (CROA). The CROA outlines specific laws and regulations companies must follow, like explaining your legal rights, allowing a three-day cancellation period and requiring a written contract. 

Can credit repair companies hurt your credit?

A legitimate credit repair company will not hurt your credit, though dishonest credit repair companies can hurt your credit and subject you to fines. It’s important to use a credible credit repair company so that you can prevent accidental involvement in scams like identity theft. 

How fast do these companies work?

The time span for credit repair varies depending on your financial situation. Each person's credit repair journey differs from another—therefore, they all have different time frames. If you have large amounts of inaccurate negative items, this process could be a slow journey. 

However, there are services within the credit repair process that have estimated time frames, like disputing errors. Credit bureaus are generally required to initiate an investigation within 30-45 days of receiving a dispute, and must notify you of the results in five business days. However, the majority of the credit repair process requires patience. How fast you’ll see changes to your credit score depend on a variety of factors, including: 

• What kind of items you are disputing 
• How long the dispute takes
• The results of the dispute
• How quickly your report updates 

Typically, seeing changes on your credit report can take at least six months if all steps are followed properly and the dispute is legitimate. 

Can I fix my own credit?

Yes, you can repair your credit by yourself. Credit repair involves numerous steps, devoted attention, open communication, honesty and efficiency. Tackling this process on your own can be effective, cost efficient and removes the risk of scams only if you follow recommended guidelines properly. 

Credit repair companies can come in handy when you’re juggling too many tasks at once. Having money management recommendations, credit monitoring and resources at your disposal could help reduce stress. 

When should I hire a credit repair company?

If you’re interested in getting back on track but need guided assistance, a credit repair company may be just what you need. Managing credit cards, loans and other bills all while keeping an eye on your credit report and score can be difficult.

Credit repair professionals can help you break down your credit report and dispute inaccurate information with a credit bureau. Whether you're short on time and need extra help cleaning up your credit or you don’t know where to start, credit repair companies should be able to help. 

Credit repair companies exist to assist clients through this daunting and confusing process. Their services have proven to be effective time and time again. It’s time to get the professional assistance you deserve—reach out to CreditRepair.com today. 

Note: The information provided on CreditRepair.com does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.