Do Credit Repair Companies Really Work?
Are Credit Repair Companies Legit?
A credit score is one of the most important components of one’s financial life. It affects your eligibility for loans and credit cards, as well as the interest rates you will be charged. That is why if you have bad credit you probably are interested in raising your credit score. However, should one hire credit repair companies? Here is what you must know.
Credit repair companies: what do they do?
Credit repair companies review your credit reports and identify problems they believe can be disputed. Some common issues they may challenge include.
- Some of the details such as address or employer filled in inappropriately.
- Other people’s accounts, most probably, because your account has been hacked or stolen by somebody else.
- The accounts that credit reporting agencies are unable to confirm.
- Outdated debts that do not come under the state laws governing collections in your state of residence.
The credit repair company then writes to the credit bureaus on your behalf and challenges these issues. The aim is to ensure that negative items are deleted so that there is an improvement in the score. They also may communicate with your creditors in an attempt to have mistakes fixed or have accounts modified favorably.
Do They Deliver Results?
Research has now indicated that credit repair firms can play a role in enhancing credit scores. According to a survey conducted by the Consumer Financial Protection Bureau, consumers who hired credit repair companies received more deletions than consumers who attempted to manage the process on their own.
Nevertheless, the odds are not always in one’s favor. Credit bureaus have 30 days to respond when items are disputed. However, they do not often conduct comprehensive investigations within this timeframe. A credit repair company can continue filing for the removal of certain items, but there is no legal mandate that makes credit bureaus remove the items if entered correctly.
Sometimes credit repair companies make the dispute so easy for the credit bureaus, that the latter has no reason to consider the dispute. Removing correct and proper negative items from credit reports is a violation of the law.
You also need to decide whether the improvement is going to be worth the investment. Some of the credit repair companies may require clients to pay one hundred dollars or even more as the initial fee, in addition to monthly charges. If you only observe small enhancements in scores, then you may not get your money back.
Advantages of Hiring Credit Repair Services
The first and biggest benefit of getting the services of a credit repair company is that the work required is time-consuming and hiring a company will help you avoid it. Applying for credit repair alone entails understanding a set of rules governing credit reporting and filing a complaint, which is time-consuming. The service saves a lot of time because it does the work of going through all the options.
It also feels less intimidating to have a professional on your side. And some incentives such as free credit checks or identity theft protection services may also come with the products.
Downsides of Hiring Credit Repair Services
The main disadvantage of credit repair companies is that they come with high charges, but they do not guarantee the services. That is, you may spend money ranging from one hundred dollars and above for several months yet your scores do not change significantly.
Other companies also tend to set upper limits that are too high to meet. Caution when you come across firms with promises of erasing bad records such as bankruptcies, judgments, liens, and most of the late payments. Items reported in your credit reports determine your scores in direct proportion.
However, a few unscrupulous businesses act against consumer protection legislation. That ranges from charging consumers unlawful upfront payments or advising them to lie about details concerning a particular item. Dealing with these companies often deteriorates your credit score or sometimes even leads to legal issues.
Some of the things that people should consider while selecting a credit repair company.
If you want to try a credit repair company, then you should choose one wisely. Here are some tips:
- Verify license and reputation. Do not join and work with companies that are not members of a group such as the Better Business Bureau. Also, confirm that they employ qualified staff such as lawyers and credit consultants for the best solutions in case of a dispute.
- Learn the terms and conditions of a service before hiring it. Seek out local gyms that offer month-to-month membership options with no lock-in period. Anyone who demands significant amounts of money for the job initially is a con man to beware of.
- Confirm written guarantees. A company should clearly state, in writing, what it will do to repair credit in a signed legal document. They should allow for refunds if they do not deliver the services as advertised.
- Look for signs when it is high risk. Do not use the services of any company that is promising unrealistic things such as the ability to wipe out all the negative credit items immediately or to help you open a new credit file at once. Those are scams.
Exec Summary Credit Repair Companies
You can also save money and perform credit repair on your own without the help of any professional. It just requires that little extra push and determination. Here are some DIY approaches.
Get Your Credit Reports The first step is to request your reports from AnnualCreditReport. Com to dispute errors. The reports by each agency can be obtained for free, once a month. Request a new report at least once every four months to avoid overloading the process.
Send Dispute Letters File a dispute with each credit bureau to determine if there are any untruths or outdated information to be scrubbed. Letters should be accompanied by evidence supporting the claims being made and these should be detailed. Standard dispute letters do not work in most cases.
Negotiate with Lenders and Collectors If you have mistakes on accounts that you are presently paying off, you should write to your creditors requesting for adjustment. You also can negotiate to pay for deletion on collections accounts. Only make sure to first get it in writing.
Practice Healthy Credit Habits When working on erasing a bad record, do not forget to work on establishing good credit as well. All mortgages, leases, loans, and credit card balances must be paid on time, obligations must be reduced, and accounts must remain open for as long as possible. Positive financial habits also have their way with the scores.
Can credit repair be done without professional help? This does involve sifting through complex credit reporting rules and regulations when going the DIY path – as well as determination in trying to contact the credit bureaus, and your lenders and collectors. However, you may be able to achieve the same or even a better outcome than hiring a company that costs a small fraction of what you would spend. That is why do-it-yourself credit repair is possible if you have the time and organizational skills.
The Bottom Line Credit repair firms can be useful if your credit rating is extremely poor at the moment. However, there are no shortcuts to taking the necessary steps to rebuild credit reports legally. Only careful reviews contribute to deleting distortions—a slower process. Based on the matters that drag your scores down today, getting professional assistance to dispute items may or may not fetch noticeable improvements within the time it takes to secure the service. Other options such as dealing with the disputes on your own can be a way to save money while not necessarily losing out on the results.
Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!