The goal of credit repair services is to help consumers dispute errors on their credit reports and work with creditors and the credit bureaus to clean up mistakes. Credit repair companies also sometimes work with clients to build good credit habits and provide coaching on how to handle their debt and lenders in the future.
Consumers can choose from a variety of credit repair companies, and it’s important to understand what each offers before signing a contract. In order to comply with federal law, companies must provide a written contract outlining their services and how long it will take them to get results. You should review the contract carefully and ask any questions you have.
Credit repair companies typically charge a setup fee of $15-$20, and then a monthly fee that ranges from $80-$120 per month. Once the initial setup is complete they start working on your report, usually requesting that creditors verify negative marks and making credit bureau disputes on your behalf.
It takes 30 days for the credit bureau to investigate your dispute and 5 business days to update you on their findings. As with any type of dispute, it’s important to be patient and remain calm throughout the process. Some people are able to have negative items removed from their reports sooner than others, but everyone’s situation is different.
Many legitimate credit repair companies check your credit reports for information that shouldn’t be there, and then dispute it on your behalf. These can include accounts that don’t belong to you, missed payments or judgments or liens that aren’t yours. They may also look for errors like misspellings, which can lead to inaccurate entries in your report.
Credit repair companies can also assist with negotiating with your creditors, especially if you have debts that are seven or more years old and not currently reporting. They can help you work out repayment agreements, lower interest rates and even negotiate settlements if necessary.
As with any service, you can find reputable credit repair companies online through sources such as Better Business Bureau ratings and Yelp reviews. You can also compare prices of different companies to make sure you’re getting the best value.
While it’s possible to repair your own credit, most consumers don’t have the time or experience to handle everything on their own. Credit repair companies can save you the time and stress of disputing incorrect information and negotiating with your creditors or credit bureaus.
Whether or not credit repair companies are right for you depends on your unique circumstances and personal goals. However, they can save you time and money by allowing you to focus on your career or the next steps in your life while they handle the rest of your credit. To avoid paying for unnecessary services, it’s a good idea to download one of your credit reports and examine the accuracy of each before hiring someone to do the work on your behalf. Then, a year later, you can do the same thing to make sure any disputed items haven’t reappeared.