Credit Repair Companies
Credit repair companies are a third-party service that tries to get inaccurate or negative information removed from your credit report in exchange for a fee. They also often provide other services, such as credit monitoring and score tracking. However, they can’t do anything you can’t do for yourself, such as disputing errors on your reports with the credit bureaus and your creditors.
The credit repair industry is notorious for scams, so it’s important to research any company before hiring them. Look at the company’s upfront and monthly fees, as well as their reputation. You can also check if they have any consumer reviews or lawsuits filed against them. The Consumer Financial Protection Bureau (CFPB) also has a complaint database that you can search by company name.
In general, a good Credit Repair company will begin by reviewing your credit reports for errors and inaccuracies. They’ll then create a strategy to dispute these items on your behalf. They’ll work with the credit bureaus and with the companies that reported the incorrect information to try to get it removed. Some of these items can be serious, such as a repossession or bankruptcy.
What Do Credit Repair Companies Do?
Most credit repair companies will charge you an initial fee to set up your account. This fee may be as low as $15, but it can go up to $200. They’ll then typically bill you a monthly fee to perform the services described in your contract. These services include contacting the credit bureaus and your creditors to dispute negative information on your reports and helping you to build a positive credit history.
Generally, the more work a credit repair company does for you, the higher your monthly fees will be. If you have a lot of negative items on your credit report, it could take months or even years for the credit repair process to finish. During this time, it’s important to be patient and stay focused on your financial goals.
Many credit repair companies will provide you with a detailed contract that states exactly what services they’ll perform and how long they expect the process to take. You’ll also be given three business days to cancel your contract without paying any additional charges. The Credit Repair Organizations Act requires companies to give you a firm total on costs and a realistic estimate of how long it will take for results.
While credit repair can help you improve your credit, it’s essential to remember that there is no quick fix for a bad credit report. You’ll need to be willing to spend time reviewing your credit reports and contacting your creditor and credit reporting agencies to dispute errors on your report. If you’re not willing to put in the effort, it may be better to find a legitimate debt settlement or credit counseling agency instead.