Researching how to fix your credit can lead you to false information and confusing, tight situations. What if there was no need for you to do it alone? That means you could use a credit repair service to significantly improve your score.
If you are trying to build your credit score, consider hiring a credit repair service to help you.
These companies aim to build your credit score by changing old and incorrect information in your credit reports while tracking and monitoring the results to prevent the error from recurring.
This post will help you understand what credit repair is and answer the question of whether it is worth using a credit repair service.
What Do Credit Repair Services Do?
The credit score is calculated based on the information in the consumer’s credit report. This information may be inaccurate.
This can happen if the lender reports incorrect information to the credit reporting agency, or if a personal information thief takes out a loan on the consumer‘s behalf.
The credit repair companies work with the credit bureaus on your behalf to correct the information given by the lenders.
Credit repair is the process of trying to fix these issues. If the information is correct, however, no one, even a professional credit repair company, can do anything about it. In most cases, it will remain on the credit report for up to seven years, after which it will disappear.
Credit repair companies help consumers to improve their credit scores for a fee. Some of them are legitimate services, while others can be scammers.
Some legitimate credit repair services check your credit reports for inaccurate information and remove it on your behalf. They also check that the information does not appear again.
When the information on your credit reports is disputed, the credit bureaus (Experian, Equifax, and TransUnion) have 30 days to investigate.
Other errors that you can include are:
- Bankruptcy that is not yours.
- Accounts that are not yours.
- Spelling errors.
- Positive items not showing on your report.
- Very old negative items.
If a credit repair company sends a large volume of disputes regarding the same item more than once, the credit bureau will fail to process the dispute within 30 days. This leads to the account getting deleted. This was issued by the Fair Credit Reporting Act (FCRA)
Is Credit Repair Legit?
There are legit credit repair services, but always watch out for scams. So have good knowledge about the company that you are hiring.
The Federal Trade Commission gives you a clear warning against scammers. Scammers will give you fake promises and they will remove accurate information thinking it is negative.
A legit credit repair service will give you training on how to handle your existing credit accounts to avoid further damage. A reputable company will not guarantee the outcome.
The Credit Repair Organizations Act (CROA) requires companies to provide the consumer with how long the process will take and the total cost for the process.
Cost for Credit Repair Services
A credit repair service charges between $69 and $149 per month, and the process will take some time to complete. It might take some months to a year. You may also have to pay a start-up fee before the process begins.
Credit repair services may provide connected packages, including some related services, like credit monitoring.
Consumers generally talk about the cost of credit repair while repairing their credit. It depends upon the service you take because varies from one service to another.
You can try TheCreditPros for your credit repair option. They provide three different plans that you can select based on your requirements. You can also choose a free consultation with them to review your credit reports.
Can I Repair Credit Myself?
Repairing credit can be done by yourself, but it depends on how complex your credit report is.
Repairing your credit begins by checking your credit reports from the three major credit bureaus. You can get the reports from AnnualCreditReport.com. Then give a detailed look over your credit report and identify the information that is incorrect, as well as any missed payments.
Finally, contact the credit bureaus to fix these errors.
All the credit bureaus have an online dispute process, which is the fastest way to send your disputes. Through this process, you can clear your errors.
You should remove false information, but if it is correct, it may be added again later to your report.
Make your payments on time. In the case of any missed payments, it will reduce your credit score.
Reduce the usage of your available credit. This decides your credit utilization ratio. It will help your credit score if the credit utilization ratio is low.
When you are repairing your credit on your own, it is good to have a plan, then execute it. In case of any mistakes, feel free to contact the credit repair services for help.
Paying down credit card debt will also help you to improve your score. Even after paying down your debts, make sure to keep your account open.
Not only can closing it impact your credit score by removing available credit and increasing your credit utilization ratio but keeping paid-off accounts open can also be helpful, since they are old accounts in good standing.
You may need to go for debt consolidation.
So, if you need help with doing all these steps, it would be best to work with a credit repair service.
You can repair your own credit, but it will take a lot of time. If you are planning to apply for a loan, mortgage, or any other huge commitments, it is better to hire a credit repair service.
It usually takes between three-six months to clear the errors from your credit reports. Keep an eye out for credit repair scammers who give false promises.
Based on your credit situation, choose the right credit company to work with, so that you can improve your scores and remove negative items.
It might cost you a small to a medium-sized monthly fee, but bad credit can cost you an unlimited amount of opportunities.
To dispute errors on your report, it requires time and some patience, so it is worth using a credit repair service.
Frequently Asked Questions
1. Is it safe to use a credit repair company?
Legitimate credit repair companies help you to clear your credit reports by removing inaccurate information. The credit repair company will likely charge you for doing this process.
2. How do credit repair companies remove negative items?
A credit repair company will first identify inaccurate items on your credit reports. Then they dispute them with the credit bureaus.
3. How much will my credit score increase if a negative item is removed?
Your credit reports will carry those negative items for seven to ten years. And your score might not improve until the negative items are removed. For example, in bankruptcy, your credit score will get a hit. So in this case you need to improve your credit score after bankruptcy.