Credit repair companies work on your behalf to contact credit bureaus and creditors to dispute inaccurate, negative information that appears on your credit reports. They also may offer additional services like credit monitoring and personal finance advice.
However, while it’s sometimes worthwhile to hire a credit repair company to help you resolve credit issues, the best way to improve your credit is by consistently paying your bills on time and keeping your balances low or even zero. You can also take steps to lower your debt, such as enrolling in a debt settlement program or working one-on-one with a credit counselor.
How to find a credit fixing company
There are many legitimate credit repair agencies that can help you dispute errors on your report, but some are outright scams. These companies often charge upfront fees, promise a specific credit score increase and advise consumers not to contact the credit bureaus directly, which is illegal. Other red flags to look for include a lack of transparency, high monthly charges and a history of credit scams.
The most reputable credit fixing companies will have a good reputation, a clean record with the Better Business Bureau (BBB) and a transparent pricing structure. In addition to comparing monthly charges and upfront fees, you should also consider how many items the credit repair company disputes per month and whether they include credit monitoring or other perks in their services.
A credit repair company will typically review your credit reports for errors and then file formal complaints with the three major credit bureaus (Experian, Equifax and TransUnion) and information furnishers, such as lenders and debt collectors, on your behalf. This process can be time consuming and requires you to have proof of the error, such as a letter from your lender or the credit bureau that identifies the inaccurate information. The CFPB offers sample templates you can use to submit your claims.
Once the credit bureaus receive your dispute, they must investigate and delete the disputed information from your report within 30 days. Credit repair companies may also help you file a complaint with your state consumer protection agency to get the issue resolved faster.
Some credit repair agencies charge a one-time fee to set up your account, which can range from $15 to $200. This fee is used to gather your personal and financial information and create a strategy plan for your unique situation.
Others charge a monthly fee that you pay as long as you’re subscribed to their services. The amount you pay varies, but the top credit fixing companies charge less than $25 a month and allow you to cancel your service at any time. You can also pause your services online without incurring any charges or losing any information that you’ve already submitted. This allows you to skip a month of service without having to cancel your subscription altogether, saving you money on startup costs. You can then resume your subscription when you’re ready. credit fixing company