Repairing your credit can take time and sometimes even money. There are a few options to consider when hiring someone to repair your credit. You have the same rights as credit repair professionals to find and address errors that could be hurting your credit scores. Living with bad credit can place a few restrictions on your life, so many people with bad credit are turning to credit repair companies to save time.
You will typically pay monthly for credit repair. The average fees range between $19 and $299. This process can take up to 6 months to a year depending on the type of plan you choose. You will also most likely have to pay a setup fee to begin. Credit repair services will argue that you may save as much as the repair costs because of the lower interest rates and better loan terms you will qualify for with higher credit scores.
There are a few things you should consider before you go directly to a credit repair service. Seeking professional help could be a worthwhile investment for your credit score, but it’s not necessary if you can do the research and commit to putting in the work of repairing your own credit.
Before you hire one of these companies to get to work on repairing your bad credit, let’s discuss your options and explain how much credit repair can cost and it if is worth it.
Is Credit Repair Worth It?
Successful credit repair can ease burdens that come with having poor credit like:
- High-interest rates that can result in higher debt
- Trouble getting approved for loans and credit cards
- Large purchases that are difficult to manage without credit
- Limited access to quality financial products
- Higher insurance premiums
- Difficulty finding employment
Make the decision on which type of credit repair you need based on your current situation. If you’re someone who hardly uses their credit score and won’t be applying for a credit card or loan anytime soon, you probably have time to repair your credit yourself.
Repairing Your Credit Yourself $0
Repairing your credit yourself costs you absolutely nothing but it can take work. You are entitled to a free credit report annually. You must be committed to examining the issues on your credit report and keeping up with your disputes.
The credit reporting bureaus have made it easier with automated dispute centers online. Many years ago it involved writing letters. However, even with those systems in place to dispute errors, you may still have to write letters and follow up with evidence of a mistake.
Once you start the process these best practices will keep your credit in check
- You should be monitoring your credit on a monthly basis.
- If you find errors, dispute them. Make sure you check back with the credit bureaus on your disputes.
- Make sure any late payments have been resolved.
- Pay all bills on time.
- Pay down your credit card balances below 30% of the credit limit.
- Don’t apply for new credit.
Even though you don’t ever have to pay someone to repair your credit it’ll take time and patience to do the research and implement what you’ve learned about how to repair your credit. You’re entitled to a free credit report from the three major credit bureaus each year. You can start there to begin reviewing your credit report for mistakes. If you find any erroneous information on your credit report, each credit bureau has an online form where you can make a dispute to remove errors for free. You can make your dispute via mail. You will find a number of sample dispute letters online and then send them to the bureaus/ Your only cost here would be postage.
Monthly Professional Credit Repair
These services mean hiring a professional licensed credit repair attorney to do all of the legwork on your behalf. If you do not want to commit to the time it takes to repair your credit on your own this option can save you time but is definitely more costly. The service is typically priced with an initial setup fee and then you pay per month, about $60 to over $130 — until you’re satisfied with the credit repair program.
Professional credit repair services will generally:
- Pull and analyze your credit report to determine areas of concern
- Identify any issues that need to be disputed
- Make disputes for you and on your behalf
- Monitor your credit report with all three bureaus
- Provide you with credit score updates as they change
- Refer you to lenders and creditors to help you build new credit
- Coach you one-on-one and educate you on credit management
- Protect you from identity theft
Among the errors that can be addressed:
- Bankruptcy or judgments that were not yours.
- Misspellings, which may mix in other people’s negative information that belongs to someone with a similar or duplicate name.
- Good credit that is not appearing on the report.
- Incorrect dates and/or debt amounts.
- Debts that are over 7 years that did not fall off the report.
- Debts that can’t be validated and verified within 30 days.
- Accounts that do not belong to you can be removed.
Who Do I Trust With My Credit Repair?
There are several companies out there that can assist you with repairing your credit. Who can you trust? How will you know if a company is reliable?
When you are hiring a credit repair service it is important that you do your due diligence. Although there are some legitimate companies, the credit repair business is full of scams who will take your money and not put in the work. It is important that you use a reputable company.
You have to be able to do the research about the company and make sure you are working with someone who is not going to steal your money. Using reputable companies that are on the BBB, have a long history of working in the industry and members of professional credit repair organizations is a start to finding the right company.
The benefit of using a credit repair company is that this is what they do, all day every day. However, a credit repair company does not have a different way than you do in disputing information on your credit reports. The biggest red flag when hiring a company is anyone who guarantees that they remove accurate information from your credit report. FTC warns against this as well as companies that claim they can give you a new identity. If it sounds too good to be true or sounds illegal you could find yourself in a worse position than before.
There are laws that protect you from inaccurate credit information and unjust collection practices. The companies that use these tactics are the best to work with. There are also laws that protect you from credit repair companies that violate the Credit Repair Organizations Act. The Credit Repair Organizations Act requires companies to give you a three-day right to cancel without charge. They must give you a firm total on costs and an estimate of how long it will take to get results.
If it sounds too good to be true it probably is!
A reputable credit repair company will educate and coach you on how to handle your credit accounts in order to help you to prevent future mistakes and not make things worse. They will encourage you to catch up past due payments. If your cards are nearly maxed out, they will advise you to pay those balances down and keep your balances below 30% of the credit card limit.
Regardless if you do it yourself or hire someone to assist with the process you will want to have a plan for properly building and maintaining credit. If you hire someone to help you, it should be part of their services.
Whatever you choose to do, make sure you do your due diligence on several companies. Make sure you look at reviews from many different sources and check the Better Business Bureau for complaints. Even if they are not a member they will post complaints from consumers.
What Do I Do Next?
Do your research! If you really want to pass of this work to a professional it is important to know who you are dealing with. You will want to look for customer reviews from many different resources, not just their website. A company with too many 5 star reviews should be avoided as well as ones with really bad reviews. They may be paying for reviews. If they are well established they will have a couple of customers who may have complained. But not the majority.
- Ask friends and family who they have used.
- Check reviews on Google, Facebook, Yelp
- Interview each company you are considering to compare plans and benefits.