What Is A Credit Repair Company?
A credit repair company is a firm that asserts it can fix your credit report and increase your credit score. They go to the credit bureaus and have the undesirable components of your credit that are pulling your score down, deleted. These companies will require you to pay some amount of money for their services and for helping you dispute items on your credit reports.
How do Credit Repair Companies operate?
When you hire a credit repair company, they will obtain your credit reports from Equifax, Experian, and TransUnion credit reporting agencies. They will go through your reports to check for any items that could be disputed under consumer protection laws. This may include.
- Wrong phone numbers, wrong addresses, or even wrong spellings of the first and last name.
- The other is a list of accounts that are not yours or have been reported by someone else.
- Inaccurate data such as duplicate accounts or information
- These are credit records that have been registered in the system but are too old to show on your credit report.
- Facts that cannot be checked or untruthful information
The credit repair company will then dispute these items on your behalf by filing the necessary paperwork and documents to the credit bureaus. The bureaus have a legal mandate to resolve the disputes within 30-45 days. If they are unable to confirm that the disputed information is accurate and current, then they must edit or delete the items. In case of successful disputing, the items will be removed from your credit reports and consequently, enhance your credit rating.
Some credit repair firms promise that they can delete most of the unfavorable records from your reports even if the information is true. However, the negatives that stem from one’s credit such as payment delays, collection accounts, bankruptcy, and judgments can only be erased if reported inaccurately. While negative information is likely to remain on your reports for up to seven years, positive information only stays for one year. However, if you dispute this information, it can be removed from your reports if the bureaus cannot confirm it.
The Credit Repair Process
On average, the process of credit repair may take around 3-6 months before the positive changes will start to become visible. The company will send as many rounds of disputes as needed on your behalf, and each round will take between 30-45 days to elicit a response from the bureaus. In some cases, it may be achieved at the end of the first dispute round, while in others, it may take longer because of the complexity of the items in question. Many credit repair services advise their clients to use their services for 6 months before determining the effectiveness.
After the process is over, the credit repair company will give you copies of new credit reports for you to see the changes that have been made. At this point, any false claims should be deleted and only facts in the account history should be posted. This can help increase your credit scores as there is less negative data still hanging on your credit report. However, any correct information such as the legitimate late payments will still affect the scores provided that it reflects on the reports within the seven-year legal period.
Is There Any Reality of Credit Repair Companies?
It is, however, important to note that there are persons who get genuine positive changes about their credit reports and scores from credit repair companies. If your reports display errors, unverified information, or even multiple accounts, a credit repair company can challenge many of them and get them deleted. This can in turn increase your credit scores for it is well said that credit scores are made and not born.
However, credit repair services are not capable of erasing or modifying any accurate and timely information within the credit report. They also cannot compel credit bureaus to delete actual negative entries like; payment history, collections, and bankruptcies. These can only be disputed if they are reported inaccurately or are outdated.
Be cautious with any credit repair companies that claim they can delete all the negative entries on your reports or say that your scores will skyrocket. Illegitimate bad marks can be removed but legitimate bad marks cannot be removed or erased. Credit repair can only ask for reporting information to be deleted but your payment record and tendencies will remain visible. Therefore, credit repair can bring some score improvements in those situations when the report is filled in with inaccurate data or information that cannot be confirmed. Nevertheless, your history and how responsibly you pay bills will remain the key determinant of your scores.
Expenses of Credit Repair Services
Some credit repair companies offer a free consultation but may charge $50-$100 for a setup fee. After that, they will have monthly service fees that will range between $60 -$120 commonly. There could also be additional fees for adding extra services, like.
- A credit check or identity theft guarantee
- Legal letters to the debt collectors However, according to the Credit Repair Organization Act, you cannot be asked to pay before the organization has provided the services they have promised to deliver. Therefore, do not join any company that demands full payment before they have a chance to challenge the items or give you the results.
The credit repair firms tend to drag the process for much longer than necessary to dispute the erroneous items. Services that are more professional and have reasonable and non-exorbitant rates are generally more valuable. Do not go for very cheap services that will tell you they can offer you what you are looking for at a very cheap rate – they are fake. The market rate varies ranging from $100-$150 per month.
Credit repair companies – are they worth it?
Occasionally, a truly reputable credit repair service may be beneficial and time-saving if your report is filled with incorrect and uncheckable negative items that are lowering your scores. Such kind of spots can be removed and it will help to improve credit scores significantly. But you must have reasonable expectations: no one can legally expunge accurate, timely negatives.
Always take your time to search for research companies and go through their reviews. Specify at the beginning exactly what they are willing to accept as fact to prevent further problems later on. Also, know that you can challenge many report errors individually for free rather than paying a company.
In general, it is wise to proceed with caution when considering the option of employing the services of a credit repair company. Think whether there are some inaccuracies in your report that may hinder your scores and that such a service can correct. Remember these services cannot alter your real payment behavior and credit profile because they are real. Thus, although you may experience some increase in some instances, it is your responsible utilization of credit in time that creates your scores.
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!