According to a study conducted by the Federal Trade Commission, one in five people has an error on at least one of the three credit reports. Errors on your credit reports may lower your credit score, which could hurt your ability to obtain new lines of credit or can make the terms of credit less favorable and more expensive.
The study, in which participants were encouraged to use the Fair Credit Reporting Act (FCRA) process to resolve any potential credit report errors, also found that:
- One in four consumers identified errors on their credit reports that might affect their credit scores.
- One in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports.
- Four out of five consumers who filed disputes experienced some modification to their credit report.
- Slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report.
- Approximately one in 20 consumers had a maximum score change of more than 25 points and only one in 250 consumers had a maximum score change of more than 100 points.
Many folks do not want to take the time to repair their credit themselves. A credit repair company can improve your credit score in exchange for a fee. You might consider using a credit repair company if you find repairing your credit overwhelming. Credit repair is not an overnight process but credit repair companies have the experience and knowledge to tackle credit issues that could be difficult to resolve on your own.
Low credit scores typically mean higher interest rates, and that means higher finance charges on your credit card balances. Repairing your credit would allow you to get a more competitive interest rate and cut back on the money you pay in interest.
Best Credit Repair Companies of 2020