If you think a bad credit score won’t do long term damage, think again. Over a lifetime, a bad credit score can cost you thousands, even hundreds of thousands of dollars for many different reasons, but mainly due to higher interest rates. Having a bad credit score can also prevent you from ever owning a house, taking a vacation to your dream destination, retiring when you are planning to, and it can also prevent you from the career you have always wanted.
What can give you a bad credit score? Not paying your bills on time, bankruptcy, even a divorce can affect your credit score in a negative way. However, what if your credit score is low because of errors that are appearing on your credit report? Maybe there is only one item that, for whatever reason, is appearing multiple times and causing further damage to your score. Whatever the error may be, it is unfair to have to pay higher interest rates and insurance premiums because the credit bureaus have entered the wrong information about you and your financial history. Believe it or not, there are millions of people with bad or lower credit scores have them for simple errors on their credit reports. This is why credit repair companies exist, to correct these errors.
What is Credit Repair?
Credit repair simply places your legal rights against erroneous entries on your credit report. For your report to have negative entries, three criteria have to be met:
- Reports have to 100 percent accurate.
- Entries have to be completely substantiated.
- Credit reports have to be completely fair.
Credit repair companies will contact the credit bureaus and companies that are listed with entries on your behalf to challenge the errors in an attempt to have them removed.
Can Credit Repair Companies Really Fix Your Credit?
Credit repair companies can fix your credit provided that there is something to fix. In other words, if there are errors on your credit report, outdated information, or entries that have exceeded the time limits, then yes, a credit repair company can help to fix your credit. However, if there are no errors on your credit report and all the information is accurate and current, then no, they cannot fix your credit. The only way your credit can be repaired in this instance is by coming up with a solid plan for paying back your debts.
Are Credit Repair Companies Legit?
Most credit repair companies are trustworthy and take pride in providing you with the best service possible and do everything they can to repair your credit. However, there are a few warning signs to keep an eye out for.
They make claims such as “an immediate 100-point increase to your credit score”. It is illegal for a credit repair company to make any promises or guarantees on the results you will experience by using their services.
They ask for an upfront payment. The Fair Trade Commission has made it illegal for any credit repair company to ask for a payment before any work has been done to improve your credit score.
They seem to have little knowledge or understanding of your rights as a consumer.
They claim to be able to remove all negative entries, even if the entries are accurate. While credit repair companies can remove incorrect entries from your credit report, they cannot remove accurate and current entries.
The Credit Repair Organizations Act was created to help protect you from scams involving credit repair. If the company you are looking into does or states any of the above statements, steer clear of them. You can also look up the company on the Better Business Bureau website for a report of the company’s performance based on previous customers.
Are Credit Repair Companies Worth It?
To answer this question, you have to ask yourself a few. First, are there errors on your credit report? Are there entries still on your report that occurred more than seven years ago? Is there a negative entry on your report that, for some reason, is posted multiple times? Are these mistakes keeping your credit score increasing, or even worse, causing it to keep lowering? If you answered yes to even one of these questions, then yes, a credit repair company is well worth it.
How do Credit Repair Companies Fix Your Credit?
An experienced credit repair company will help to improve your credit score by:
- Knowing the laws and regulations established to protect you, the consumer.
- Knowing how to handle your individual credit situation.
- Knowing what legal loopholes exist to help resolve credit issues.
A credit repair company will review your credit reports, all three of them. Why all three? Each reporting agency uses different sources for the information they place on your credit report. By reviewing these three credit reports, the credit repair company can handle your specific case more thoroughly.
Once they have reviewed your reports, they will identify entries that they believe are inaccurate and will begin disputing the entries. However, repairing your credit goes beyond simply filing disputes with the credit bureaus. This process may sound simple, but in reality, it can be an exhausting task. Often, credit repair companies will have to deal with creditors themselves to help resolve your credit issues.
Should I Use A Credit Repair Company?
Unless you have the time and organizational skills to spend hours on the phone with credit bureaus and creditors, read and write countless emails, as well as track them, and keep records of all written correspondence regarding the repair of your credit report, then you should seriously consider the use of a credit repair company.
However, if you have very little on your report that you want to dispute, you can do all of this yourself. Credit repair companies make fixing your credit easier by taking on all of the hassles and headaches that come with this type of undertaking. If you want to tackle this on your own, there is no law saying that you have to use any type of company. For more information on how to clear errors from your credit report, click here.
Cost of Credit Repair Services
The cost of credit repair companies will vary company to company. However, the average cost for this type of service is between $50 and $100.
Credit Repair Fees
Along with the credit repair company’s monthly service fee, there may be additional fees to be aware of. For example, many credit repair companies charge a onetime fee, about $15, to pull your credit reports. Ask the company you are planning on using for any additional fees they may charge.
Non-Profit Credit Repair Companies
Non-profit credit repair companies do not exist. Credit repair companies charge a fee to do all of the legwork necessary to repair your credit history and score. However, there are plenty of non-profit credit counseling organizations willing to help you get your finances back on track. Before you request their services, check their background to ensure they are reputable and not just a scam waiting to happen.
Can You Pay to Clear Your Credit History?
You have probably heard of companies that claim that they can remove your bad accounts from your credit report for a fee, an excessively high fee. Before you decide that you want to use the services of one of these pay-for-delete services, you caution. First, they are very expensive. Secondly, there is no guarantee that your score will improve, or that the negative accounts will even be removed from your credit reports.
Instant Credit Repair
When it comes to repairing your credit and raising your credit score, there is no such thing as instant. Repairing your credit will take months, even years to see the desired results. However, there are services, called rapid rescoring services, offered by independent credit reporting agencies and are typically used by mortgage brokers and lenders that are trying to get better loan rates for their customers. If you are being offered these services directly, and not through your broker or credit agency, it is more than likely a scam.
Fixing Credit Scores Illegally
“Jamming” is a scam that many of the pay-to-delete credit repair agencies use. They dispute everything negative on your credit report repeatedly, hoping that at least one dispute will stick when the lender does not validate the negative entry in the 30-day window. This method of “repairing” your credit has two downfalls. First, the negative entry will reappear once the lender reports to the credit bureau, which they do on a monthly basis. Second, it is an illegal scam that cost you, even more money simply to end up with the same poor credit score 30-days later.
Should I Use A Loan To Fix My Credit?
There are lenders that specialize in lending to consumers with poor credit, usually referring to them as “credit repair loans”. Obtaining a loan and making timely payments until the debt is paid off may help to improve your credit score. However, it is only effective if the lender reports to all three major credit bureaus, all errors from your credit reports have been removed and you have already started making your delinquent debts current. Additionally, these types of loans come with the cost of very high interest rates.
Credit Repairing Credit Cards
Just as stated above with using a loan to improve your credit score, using a credit card can backfire on you if you are not totally committed to making payments on time, keeping your balances low, and being disciplined with your decisions when tempted to use your card. If you can do this, then using a credit card to improve your credit score can work. If you are planning on obtaining a credit card for this purpose, you may want to start with applying for a basic credit card at the bank where you already have a checking or savings account. This will make making your payments as simple as transferring the money from your account to make the payment for your credit card.
Credit Repair for a Mortgage
If your dream is to someday own a home of your own, you will need to make sure your credit score is as high as you can get it. The lower your credit score, the harder it will be to get a mortgage with a good interest rate if you can obtain one at all. It will also mean that you will have to pay a larger down payment if you are approved.
Guaranteed Credit Repair Service
Unlike many other industries where a guarantee is typically viewed as being a good thing, in the credit repair industry, it triggers a red flag. Any credit repair company that guarantees specific results should be avoided. In fact, for a credit repair service to even suggest a guarantee is violating the Credit Repair Organizations Act. So if the company you are considering to help you repair your credit is offering you a guarantee on improving your credit, keep looking.
Lawyers That Help With Credit Repair
A credit repair attorney can perform various services that are aimed at repairing your credit. Some of these services include negotiating with credit reporting bureaus, evaluating potential errors on your credit reports, and negotiating with your creditors for settlements.
Affordable Credit Repair
Credit repair companies do charge a monthly fee for their services. Shopping around and searching online can help you to find a repair company that fits your budget. Just make sure they are a trustworthy and reputable company before you pay them. Check for reviews from previous customers and see how they rate on the Better Business Bureau website.
The Top 10 Credit Repair Companies/Agencies
Have you Googled credit repair companies? If not, you might be surprised that such an inquiry will generate around 13 million results. That is a lot to have to sort through and phone calls to make when you are trying to find the best credit repair company for your needs.
While each case is unique, the quality of the service provided should always consistently be 100 percent the best. To help narrow down the search for you, we have listed the top ten credit repair companies that specialize in helping people repair the credit shortcomings.
- Cost/Fees: $79.95 – $119.95 Monthly / $19.95 For Credit Reports
- Telephone: 888-614-8516
- Website: lexingtonlaw.com
- Address: 360 N. Cutler Drive, North Salt Lake, Utah 84054
Sky Blue Credit Repair
- Cost/Fees: $59.95 Monthly / $59.95 Setup Fee
- Telephone: 888-906-1351
- Website: skybluecredit.com
- Address: 6001 Broken Sound Parkway,Ste 300, Boca Raton, FL 33487
The Credit People
- Cost/Fees: $59 Monthly / $19 Setup Fee
- Telephone: 866-382-3410
- Website: thecreditpeople.com
- Address: 6975 S Union Park Ave,Suite 600, Cottonwood Heights, UT 84047
MSI Credit Solutions
- Cost/Fees: $98 Monthly
- Telephone: 866-217-9841
- Website: msicredit.com
- Address: 12790 Merit Dr., Ste 614, Dallas, TX 75251
- Cost/Fees: $99.95 Monthly / $14.99 For Credit Reports
- Telephone: 855-382-1978
- Website: creditrepair.com
- Address: P.O. Box 3928, Salt Lake City, UT 84110
- Cost/Fees: $69 Monthly / $79 Setup Fee
- Telephone: 855-598-0446
- Website: mycreditgroup.com
- Address: 431 N. Graham St. #838, Stephenville, TX 76401
Veracity Credit Consultants
- Cost/Fees: $49 to $79 Monthly, Depending on Plan / $69 to $99, Depending on Plan
- Telephone: 866-518-2194
- Website: veracitycredit.com
- Address: P.O. Box 1140, Denver, CO 80201
- Cost/Fees: $59 Monthly / $89 First Work Fee
- Telephone: 866-639-3426
- Website: ovationcredit.com
- Address: 9310 Old Kings Road South Suite 404, Jacksonville, FL 32257
180 Credit Solutions
- Cost/Fees: Monthly Fee Varies Per Customer / Setup Fee Varies per Customer
- Telephone: 866-454-6252
- Website: 180creditsolutions.com
- Address: 7214 Hwy 78, Sachse, TX 75048
Park View Credit
- Cost/Fees: Monthly Fee Varies Per Customer / Setup Fee Varies per Customer
- Telephone: 888-991-6412
- Website: parkviewcredit.com
- Address: 17216 Saticoy St. #421, Van Nuys, CA 91406
The Number One Credit Repair Company
You will notice that Lexington Law Firm is located at the top of our list, they are there for a reason. While there are plenty of reputable credit repair companies in the industry, Lexington Law has the experience and knowledge to help people get their credit back on track.
Credit Repair Do It Yourself
If you have decided that you want to repair your credit yourself, there a few things you need to do and know before you start.
Before you begin repairing your credit, you will need to know exactly what is on your credit reports that you can have corrected. To do this, you are going to need a copy of your credit reports from the three major credit bureaus Experian, Equifax, and Transunion. You can go to annualcreditreport.com and receive a free copy of all three once every twelve months.
Once you have identified any errors on your reports, start disputing them. Errors are unfortunately common on credit reports. Check to make sure your name and address are accurate and spelled correctly. Check to ensure they have the right Social Security number as well. Then, start checking the credit history for any errors. If you find the same error on more than one credit report, you will have to dispute the error with each bureau involved. Click here for examples of dispute letters you will need to send to the credit bureaus.
Once the repairs have been made to your credit reports, the rest of the repair process is up to you.
- Pay down your debts, especially credit card debt.
- Pay all bills on time.
- Avoid applying for additional credit
Having a low credit score is not the answer. Becoming one of the most important three-digit numbers you will ever have in your life, it is imperative that you keep it as high as possible and your credit in good health. Having an experienced credit repair company can help you to achieve this goal.