Credit repair services will help you fix errors on your credit report in exchange for a fee, but it’s easier than you might think to do it yourself

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  • Credit repair Agencies can help you remove incorrect information from your credit reports in exchange for a fee. But you can also file a credit report dispute yourself, for free.
  • These companies usually give you access to your credit report for an additional fee, but you can get your credit report for free every week until April 2021.
  • Remember that credit repair services are not miracle workers; they cannot make late payments disappear from your report if you have actually paid your overdue bills.
  • Consider alternatives to credit repair, like repairing your credit on your own, working with a credit counseling agency, or using a debt consolidation loan to get your finances back on track.

If your finances aren’t where you want them to be, it’s easy to leave your credit rating spiral out of control. After all, your payment history is the most important factor that makes up your FICO score, which means that a few late payments can drop your score. Defaulted accounts and collections can further hurt your score, as well as the total amount you owe against your credit limits. And when you hurt your credit score, you reduce your chances of getting approved for new lines of credit or getting a great interest rate when you apply for a loan.

If you find yourself in a situation where it seems like nothing is going well with your credit, you might be wondering if you need the help of a third party. Credit repair companies promise to help you rectify any mistakes in your credit report, but before you sign up, it’s important to know what they can and can’t do.


What is a credit repair business?

According to the Federal Trade Commission (FTC), consumers hire credit repair companies to help them figure out what was wrong with their credit and to investigate any errors that may be in their credit reports. However, these companies cannot remove negative information from your credit report if it is correct. All they can do is figure out what the errors are, then help you take the necessary steps to correct the errors so they can stop damaging your credit score.

Lexington Law, a credit repair company that also offers legal advice, says the expertise of credit repair companies is what makes the process easier for consumers. Credit repair companies “know what to look for, understand the process necessary to correct inaccuracies, and are made aware of what customers are legally entitled to ask of credit bureaus and creditors.”

While consumers can research credit report errors on their own, professional help could make the process easier and less stressful. After all, not all consumers are educated about credit, and a helping hand along the way may even be needed to keep some consumers on track.

Credit repair versus credit counseling

Lexington Law also says that credit repair should not be confused with credit counseling. Credit repair companies tend to be for-profit agencies that will help you repair your credit for a fee, while credit counseling agencies tend to be non-profit companies that help consumers create a plan to get out of debt and get their finances back. on the right track.

Nonetheless, the FTC notes that you should be aware that being a nonprofit organization does not mean that the services are free and that some credit counseling agencies charge high fees or require their clients to make voluntary payments. . With that in mind, you need to make sure you know all of the upfront costs involved with any service you are looking for as you work to repair your credit score.

What to consider before using a credit repair business

The most important thing to consider when it comes to credit repair is the fact that no matter what they say, there is nothing credit repair companies can do for you that you cannot do on your own.

The FTC points out that “just time and a personal debt repayment plan” can really improve your credit. Credit repair agencies can help you remove incorrect information from your reports, but it’s also something you can do on your own.

If you decide to work with a credit repair company, you should know these details in advance:

  • The FTC notes that it’s illegal for credit repair companies to lie about what they can do for you.
  • It is illegal for credit repair companies to charge you before they help you.
  • You have the legal right to get a written agreement before they perform any services.
  • You also have the right to know the exact costs you will have to pay, the time it will take to get results and any guarantees.
  • You have three days to cancel the contract at no cost.

If a credit repair company does not perform the services it promises, you have the right to sue them for your losses and seek punitive damages. You also have the right to join a class action lawsuit against any credit repair company you work with.

How much does a credit repair cost?

You might want to work with someone who can help you fix your credit, but be aware that you could pay off large sums over time. Not only can you expect to pay a monthly fee while you are receiving credit assistance, but other upfront fees may also be charged to access your credit reports or start work.

While the fees for credit repair companies can vary, here are some of the more popular companies you can work with and how much you can expect to pay:

Monthly fee Other expenses $ 99.95 $ 14.99 credit report fee
Lexington’s Law $ 89.95 to $ 129.95 N / A
Oak credit repair $ 85 N / A
Apex credit correction $ 99 $ 1 credit file fee
CreditUS $ 99 $ 99 first job fee; $ 48 for credit reports

Should You Use A Credit Repair Company?

Only you can decide whether working with a credit repair company is worth it. However, it may be smarter to take the necessary steps to remove negative information from your credit reports yourself. After all, credit repair costs vary, but this assistance is never free.

Most companies charge a monthly fee as well as an upfront cost to get your credit reports, and the monthly fee can go up to $ 100 with the more popular agencies. You also have the right to get your three credit reports for free every week on until April 2021, so there is no need to pay for this service.

While it is possible to remove negative information from your credit reports if it is incorrect, you probably won’t be able to remove negative information from your reports if the data is correct. For example, you can’t make a late payment go away if you really paid a late bill and that information was reported to the credit bureaus. Only time can make real negative reports go away, notes the FTC.

In fact, most negative reports stay on your credit reports for seven years, but bankruptcy will stay on your report for 10 years. “Unpaid judgments against you will remain on your report for seven years or until the statute of limitations expires, whichever is longer,” reports the FTC.

How to dispute an error on your credit report

If you get a copy of your credit reports and find negative information that is inaccurate, you can dispute it yourself. To dispute incorrect information on your credit reports, you should take the following steps:

  • Contact the creditor (such as your bank) who reported the negative rating on your report to try to resolve the issue
  • If you are unable to resolve the issue with your creditor, contact the credit reporting company that issued the report with the incorrect negative rating.
  • You will want to send the credit reporting agency a letter using this format provided by the FTC

The FTC says credit bureaus are required to investigate items you dispute within 30 days, unless they determine your dispute is frivolous or unwarranted.

Consider alternatives to credit repair

You should also consider other options to repair your credit if you have room to improve. This can include the DIY method, which involves creating a plan to stay on top of your bills and pay off your debts over time.

To help you repair your credit on your own, you need to make sure all your bills are paid early or on time, work to pay off any overdue or collection debts, and pay off your debts to reduce the use of your money. credit. You should also refrain from opening or closing too many accounts while trying to improve your credit score.

Read more: How to maintain your credit score when the economy is uncertain

Also consider debt consolidation, which involves getting a debt consolidation loan or 0% APR rate credit card that allows you to pay off your debt at a lower rate, at least initially. Finally, consider contacting a credit counseling agency who can help you design a plan to pay off your debt and change your lifestyle to avoid getting into more debt in the future.

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