Table Of Contents
- Credit repair services can help improve your credit score by disputing errors on your credit report in exchange for a fee, typically between $60 and $200
- These services can save you time and can help you manage your current credit accounts to avoid further damage.
- Credit repair services do not guarantee results, so consider the packages and additional services companies offer to weigh up the pros and cons.
- You can repair your credit yourself and save money by fixing errors and mistakes directly through credit bureaus without the help of credit repair services.
Credit Repair Cost
You can expect to pay anywhere between $60 to $200 a month for a subscription service, so consider the length of time you expect to be paying this fee when comparing companies.
For example, if it takes roughly six months to repair your credit score, and you pay $150 a month, then it can cost you upwards of $900 for the entire service.
The Credit Repair Organizations Act requires companies to provide customers with a firm total of costs and an estimated time frame, so make sure this is given to you.
What Is A Credit Repair Service
Credit repair services can help you correct errors on your credit report. While you can correct these errors yourself, credit repair services dispute mistakes and contact credit bureaus on your behalf.
They’re usually used by people looking to improve their credit score or overall financial management.
Errors that might be disputed include:
- Accounts that don’t belong to you
- Legal actions that aren’t your responsibility
- Out-of-date negative marks
- Unvalidated or unverified debts
- Misspellings that cause account confusion
How Credit Repair Services Work
Credit repair services work by reviewing your credit report and attempting to have errors removed. Fixing these errors can improve your credit score. Depending on the company you work with, some service providers offer additional features including:
- Credit score updates
- Credit monitoring
- Financial advisory services
- Writing cease and desist letters
- Writing letters of recommendation to lenders
What To Look For In Credit Repair Service
Different credit repair companies offer different packages. Think about these factors when shopping around:
- Packages and fees: Credit repair companies offer a range of extra services; check the fees (whether upfront or subscription-based) and the specific services each company offers.
- Discounts and perks: Some companies offer discounts for certain people like military or student plans. Many offer additional features for free, such as credit monitoring.
- Potential scams: The Federal Trade Commission recommends that you avoid services promising credit score improvement, as it’s not a guarantee with any credit repair service.
- Customer reviews: These are a great way to check that the company you’re working with is legitimate as they give you insight into other peoples’ experiences. This is particularly useful when considering additional features like advisory services.
Repairing Credit Yourself
You can save money by repairing your credit score yourself. Things you can do include:
- Contacting credit bureaus about errors: The major credit bureaus (Experian, Equifax, and TransUnion) have online dispute processes that you can use to address problems.
- Look for unverified information: If your credit report includes information that cannot be validated then this information can be removed (although it could be reinstated at a later date).
- Check for misspellings or out-of-date information: Minor errors like this can make a difference to your credit score, so double-check all information on your report.
Maintaining Good Credit
Building and maintaining a good credit score is essential for improving your overall financial position and access to loans and credit cards. Here are some things you can do to maintain good credit:
- Make repayments on time: Ensure you pay your debts on time or early, as missed payments can negatively impact your credit score.
- Use less of your available credit: Ideally, avoid using more than 30% of your total credit limit. The lower this number is, the better for your credit score.
- Make small payments regularly: Make multiple small payments throughout your billing cycle to help you stay on track.
- Spend within your means: As a general rule, don’t borrow money if you can’t afford the repayments. Being able to repay your bills ensures that your credit score improves.
You can monitor your credit score by using AnnualCreditReport.com.
Pros And Cons Of Credit Repair Services
Outlined below are some important pros and cons of using a credit repair service.
|Pros of Credit Repair Services||Cons of Credit Repair Services|
|Can improve your credit score: Credit repair services dispute errors on your credit report to help improve your score.|
Help to maintain good credit: Additional services, like financial advisory services, can help maintain your credit in the future.
Saves time: Someone else is managing your credit disputes on your behalf, so it saves you the hassle of doing this yourself.
|Expensive: Credit repair services are expensive, and the cost can increase if you pay monthly for a long period of time.|
Not guaranteed to work: These services are only worthwhile if they find errors on your credit report to dispute.
You can do it yourself: You can dispute errors on your credit report yourself without the help of a credit repair business.
Potential Scams: Lots of illegitimate companies promise to improve your credit score and this is never a guarantee.
Frequently Asked Questions (FAQs)
How Long Does Credit Repair Take?
There is no definite time frame in which you can expect your credit score to improve, but many companies estimate that it takes roughly six months to see improvements.
How Much Do Credit Repair Services Cost?
Credit repair companies charge a fee for these services, with subscription models being the most commonly used form of payment. These average between $60 and $200 a month, depending on the package you choose.
Can Credit Repair Companies Guarantee Results?
Credit repair companies cannot guarantee results and a reputable company will not promise you specific outcomes, however, you can look for a company with a money-back guarantee to provide some peace of mind.
How Does The Fair Crediting Report Act (FCRA) Impact My Credit Repairs?
Put simply, the Fair Crediting Report Act outlines your rights in regard to credit scores and bureaus, allowing you to:
Access your credit report and credit score on request
Dispute incorrect information
Remove outdated information from your credit report
Give permission before employers can access your credit history
Can I Fix Bad Credit Myself?
Errors on your credit report can be disputed and amended yourself by contacting credit bureaus directly. Whilst credit repair services can do the ground-work for you, you can save considerable funds by doing it yourself.
How Do I Maintain Good Credit?
You can maintain good credit by paying your debts on time, using less than 30% of your total credit limit, making multiple small repayments throughout your billing cycle and ensuring that you only borrow money that you can feasibly pay back.