A credit fixing company can help you find errors on your credit report and work to get them removed. They also can offer other services, such as credit monitoring and personal finance advice.
But beware of companies that promise a quick fix. They might be scamming you out of money or even legal trouble.
What is credit repair?
A credit repair company works to get information on a consumer’s credit report corrected or removed altogether. They’ll typically communicate with the credit bureaus and data furnishers via the internet, phone or US mail. They can charge a flat fee, a monthly subscription or a fee-per-deletion (where clients only pay when an item is successfully deleted from their credit report).
Most reputable credit repair companies start by reviewing a consumer’s credit reports for errors. They’ll identify inaccurate entries such as bankruptcies, judgments, liens and collection accounts, then work to get them removed from the reports.
A reputable credit repair agency will also offer other services like debt management, identity theft protection and personal finance advice. But they can’t do anything that a consumer can’t legally do on their own, such as disputing inaccurate information with the credit bureaus and creditors. They also can’t demand payment up front or make lofty promises that are hard to verify.
How does a credit repair company work?
Credit repair companies work on your behalf to dispute inaccurate information with credit bureaus or the data furnishers that report your information to them. They may also negotiate with creditors on your behalf to settle outstanding debts and improve your credit score.
These services typically cost money, but the best credit repair companies will communicate clearly and honestly about their costs and services. They’re also required to give you three days to cancel your contract without paying fees or penalties.
Some companies offer multiple options, including flat fee services and monthly subscriptions. Others charge a fee-per-deletion model where you only pay when an item is removed from your credit reports. Lexington Law, one of the oldest credit repair companies in the industry, takes a legal approach to the process with lawyers and paralegals navigating credit disputes on your behalf. They also provide a variety of other services, like identity theft protection and personal finance advice.
Can a credit repair company help me?
Credit repair companies can help you by investigating mistakes on your report and negotiating with creditors and credit bureaus to remove inaccurate information. They may also advise you on strategies that can improve your credit, such as paying debts on time and disputing errors on your reports.
Legitimate credit repair services typically provide a personalized service, such as reviewing your credit report for errors and interviewing you to determine whether the derogatory marks reported are legitimate. The best credit repair companies will also keep you updated throughout the process, including sending progress reports and new copies of your credit report.
However, it’s important to understand that credit repair companies can only dispute errors on your reports and cannot guarantee the removal of any negative information. In addition, the CFPB warns against using credit repair companies that demand payment upfront or promise results that sound too good to be true. These practices violate the Credit Repair Organizations Act and could result in penalties for the company.
Can I repair my credit on my own?
It’s completely possible to repair your credit without paying a credit repair company. The process involves reviewing your credit reports and disputing errors directly with the credit bureaus. You can also take steps to improve your financial situation by making on-time payments and reducing debt. If inaccurate information is found, it must be removed from your report.
If you’re having trouble managing your finances, a credit counseling agency may be able to help. These agencies can work with you to create a budget and find realistic ways to reduce your debt. They can also negotiate with creditors on your behalf to lower your payment amounts.
Remember that you can download your free credit reports from the three major credit bureaus every 12 months. This is a great way to check for errors and identity theft. You can also use tools like Credit Karma to monitor your credit reports and dispute any mistakes. Just make sure to review your reports a year later to ensure that any disputed items haven’t reappeared.