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Your credit score is one of the most important numbers you have. It can determine interest rates on your loans or you even qualify for it. A lower-than-average score can make it difficult to purchase a new car, buy a home, or start a business.
If your current FICO score is lower than you want, a credit repair company may be able to help. But is credit repair worth it, and can it really help repair your credit? This guide gets to the truth about credit repair to help you determine if this is the right option for you or not.
Is Credit Repair Legit?
With so many stories running around about credit repair scams, it can be difficult to tell if these companies are legitimate or not. The truth is that there are bad companies out there masquerading as credit repair agencies that have scammed consumers. However, there are plenty of legitimate companies that can help you through the credit repair process.
The trick is to know the difference. Fortunately, there are several factors that can help you determine if the company is legit or not. Below is a list of things you should look for when searching for a reputable credit repair company.
- No guarantees or promises. You should avoid any company that promises it can improve your credit score or guarantees it can remove negative items from your credit. While improving your credit report is always the goal, no legit company can guarantee this.
- Up-front pricing. Never work with a credit repair company that isn’t up front about its pricing. You should know right from the start exactly how much its services cost as well as what’s included.
- Contract in writing. Don’t just take the representative’s word for it when it comes to pricing and service details. Instead, get everything in writing. Any legitimate credit repair company will provide you with a contract that outlines all the details.
- Good reviews. Take some time to research any credit repair company you’re considering by reading a number of online reviews. Typically, you can easily spot companies with a history of scamming their customers.
- Cancellation policy. Reputable credit repair companies often include a cancellation policy. For example, you may have three days to change your mind and cancel your services.
Does Credit Repair Raise Your Credit Score?
One of the most common complaints regarding credit repair agencies is that they focus on repairing your credit report and not on your credit score. While technically this is true, the details on your credit report directly impact your credit score.
The reality is that no credit repair agency has the power to change your credit score. What they can do is help you take steps to remove as many negative issues on your credit report as possible and provide advice for improving your score.
Will My Credit Score Improve Immediately?
Chances are your credit score didn’t appear overnight. Likewise, it will take time to repair any damages. For instance, if you find an error on your credit report, the credit reporting agencies have at least 30 days to respond to your dispute.
It’s likely to take longer for the removal of this error to impact your overall credit score. In many cases, a person shouldn’t expect to notice changes to their credit report for at least the first six months.
Does Credit Repair Work?
Depending on your specific situation, credit repair services can help. For example, if you have any errors on your credit report that are negatively impacting your score, a credit repair company may be able to help you identify and remove this information. Reputable credit repair companies also review your credit reports and provide tips for improving your score.
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Are Credit Report Errors Common?
According to a recent study, one-third of all Americans claim to have one or more errors on their credit report. These errors can range from wrong personal information to incorrect debt claims. A credit repair agency can help you examine your credit reports from all three credit reporting agencies, Equifax, TransUnion, and Experian.
Can Credit Repair Companies Fix Mistakes on My Credit Report?
While no credit repair company can guarantee its ability to fix mistakes on your credit report, it can help you file a dispute. These companies submit credit dispute letters to all relevant agencies on your behalf. Credit reporting agencies typically have 30 days to either substantiate their claims or remove them from your credit report.
Can Credit Repair Companies Remove Negative Items?
Credit repair companies don’t have the power to remove negative items from your credit report. What they can do is help you file a dispute to remove any incorrect information or claims on your credit report.
Some credit repair companies can also work with your lenders to negotiate a repayment plan on your behalf. For example, through negotiations, the credit repair company may be able to entice a lender to reduce a portion of the interest to lower your overall bill.
Additionally, many reputable credit repair companies provide tips for improving your credit report. These companies can also work with you to develop a strategy that may help you repair, restore or rebuild your credit over time.
Is Credit Repair Worth It?
Depending on your specific situation, working with a credit repair agency may be worth it. While some people attempt DIY credit repair, this process can be very time-consuming. You can avoid this hassle by working with a credit repair company.
If you’re willing to put in the time and research, you may be able to handle the process yourself. However, a credit repair company can handle many tasks for you. The benefits you might receive from an improved credit score, such as better interest rates and lower auto insurance premiums, can more than pay for these services over time.Your credit reports impact so many areas of your life — where you work, where you live, what you drive. Investing in credit repair today may help provide a better tomorrow.
[Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C. Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.]
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