Insider’s Guide to Buying Credit Repair
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Most ratings and buyers’ guides of credit repair companies are nothing more than paid advertisements—but not here!
Here is the insider’s guide to the good, the bad, and the ugly credit repair companies. Our guide is dedicated to helping everyone find the best credit repair company for their situation—or none at all.
You deserve this unbiased guide to credit repair. Let’s take a closer look at your credit repair options for your personal finance journey.
Disclosure: Tradeline Supply Company, LLC is not affiliated with any of the companies mentioned in this article. This article is for informational purposes only and does not constitute an advertisement, endorsement, or recommendation by Tradeline Supply Company, LLC. We do not receive compensation for this content.
Who Needs Credit Repair?
First things first, it’s important to determine whether or not you need credit repair. In some cases, credit repair can be a big help. But in other cases, you won’t find the results you are looking for with credit repair.
Here are some reasons why you might need credit repair.
Mistakes on Your Credit Reports
Before you jump into credit repair, take the time to look closely at your credit reports.
You can get a free copy of your credit reports through AnnualCreditReport.com. With your free copies in hand, dive into the details of your credit reports.
You may find mistakes concerning your credit usage, such as an incorrect account balance or reports of late payments that you have a record of paying on time.
Importantly, the law requires that any information on your credit reports is accurate, complete, timely, and verifiable. Credit repair is a useful tool if you spot any mistakes on your credit reports that go against these rules.
Fraudulent Activity on Your Credit Report
A mistake here and there on your credit reports is one thing. But fraudulent activity is an entirely different beast.
Fraudulent activity on your credit reports resulting from identity theft can have severe consequences on your credit scores. With the right information, a criminal can open credit accounts in your name. And, of course, criminals won’t be managing your credit responsibly.
With extensive fraud showing up on your credit reports, you should pursue credit repair.
Clean Reports Don’t Need Credit Repair
Even with error-free credit reports, you could be dealing with bad credit scores. That’s because the accurate information on your credit reports is dragging your score down.
If the details on your credit reports are correct, then credit repair can’t remove it. So, if you don’t spot any mistakes or fraud on your credit reports, then credit repair is not the right move.
Want to learn about the difference between credit repair and tradelines? Check out this helpful infographic.
Why Choose a Credit Repair Company When You Can Do It Yourself?
So, you’ve decided that credit repair is the right move for your finances. Now it’s time to choose between a credit repair service and the DIY option.
That’s right! It is entirely possible to go it alone when it comes to credit repair. In fact, some of the strategies you’ll need to implement while improving your credit score are entirely in your hands.
So, why would you work with a credit repair company when you can tackle this yourself?
The answer boils down to your time available and the expertise of reputable credit repair companies. It is absolutely possible to dispute credit report errors on your own. But as with all personal finance tasks, this takes time that you may or may not have available.
If you only spot one or two errors on your credit report, the required time to file your disputes might not add up to that much. But when you are looking at extensive errors or fraudulent activity on your credit report, DIY credit repair may take more time than you are willing to provide. When you work with a credit repair company, you can outsource this often time-consuming task.
Beyond the time aspect, a reputable credit repair company will have expertise in the detailed process. Instead of trying to figure everything out yourself, working with a company that handles credit repair regularly can speed up the process.
But don’t forget to consider your budget. Although credit repair costs can be reasonable, those on a tight budget might decide to stick with the DIY options.
How to Handle Credit Repair on Your Own
DIY credit repair is a worthwhile option to consider. If you decide to pursue this path, here’s how to handle your own credit repair.
Dispute Errors
If you’ve spotted errors on any of your three credit reports, disputing those mistakes is critical. Luckily, the major credit bureaus have an online dispute option to streamline the process.
Here’s where to start your disputes with Equifax, Experian, and TransUnion:
Although the exact process varies with each credit bureau, be prepared to provide more information about the error. It may take days or weeks for the credit bureau to get back to you. If they determine that the original information on your credit report is inaccurate or outdated, they will remove it. Otherwise, the credit account details will remain on your reports.
Make On-time Payments
Your payment history accounts for 35% of your FICO scores, which makes it the most important credit scoring category. With a solid history of on-time payments, your credit scores will benefit. But a spotty payment history will have a negative impact on your credit scores.
The good news is that making on-time payments is within your control. Make an effort to stick to your payment deadlines. Over time, that could lead to the credit score boost you’ve been hoping for.
If you are struggling to keep up with your payments, consider reaching out to your lenders. In some cases, they may be able to adjust your payment deadline to better fit with your cash flow, and some lenders may be willing to provide a temporary reprieve in the form of forbearance.
Make a Debt Repayment Plan
If you have too much debt, that could be holding back your credit scores. The solution is to lower your debts by paying them back ahead of schedule.
Although easier said than done, following a debt repayment plan could lead to the credit score you’ve been working towards. So, what are the best debt repayment options?
The most popular repayment strategies are the snowball method and the avalanche method.
With the snowball method, you first pay off your debt with the smallest balance. Once you clear that first debt from your books, you can apply that monthly payment to your next largest debt. With each debt you repay, the snowball will grow to eliminate larger debts more quickly.
The avalanche method is another popular option. With this strategy, you prioritize first paying off your debt with the highest interest rate. Once eliminated, you move on to the debt with the second-highest interest rate.
Both strategies are efficient ways to pay off debt. And you may see your credit scores rise as you lower your debt burden. But you’ll have to decide which option makes the most sense for your financial goals.
What Do Legitimate Credit Repair Agencies Do?
When working with a legitimate credit repair agency, you can expect the following:
- A complete review of your credit reports: A legit credit repair agency will take a close look at your credit reports to find any errors.
- Dispute mistakes: If any mistakes are found, a credit repair agency will dispute them for you.
- Provide ongoing credit monitoring: Some credit repair agencies offer an ongoing service to monitor your credit reports for fraud.
A credit repair agency should handle the dispute process for you. But a legitimate company will not dispute information that is correct on your credit report, even if it is dragging your credit scores down.
Top Five Qualities of a Great Credit Repair Business
If you want to work with a credit repair agency, you’ll need to sort through many fraudulent operations to find a legitimate credit repair service. But the good news is that many credit repair services offer worthwhile services. The trick is to find the right companies.
If you want to enlist the help of a credit repair service to give your personal financial situation a boost, here’s what to look for in a great credit repair business:
Realistic Promises
Legitimate credit repair agencies don’t promise you the moon. Instead, they set realistic expectations for customers in need of credit repair.
For example, a legitimate operation won’t promise to remove any accurate information from your credit reports. If the information is accurate, there is nothing to dispute.
Upfront Pricing
You shouldn’t have to dig around for a price. Most reputable credit repair companies will put their pricing in an easy-to-spot section on their website.
After all, you want to make sure your budget can handle the cost.
Extensive Contract
Before moving forward with any particular company, you should receive a full contract with very transparent details. The contract should include the cost, work to be done, and any other relevant details.
Without a contract in place, you can’t be sure that the company is legitimate.
Positive Customer Feedback
Don’t just look at the customer reviews on a company’s website. Instead, check out what people really think on Trustpilot or the Better Business Bureau.
A legitimate company should have genuine glowing reviews from real customers.
Money-Back Guarantees
If a company is willing to honor a money-back guarantee, it’s likely legit. After all, they believe in their services so much that they are willing to bet on themselves. Although not all legitimate companies offer this kind of guarantee, it can make you feel more comfortable about working with a particular company.
As you are exploring your options, a few popular credit repair companies include Pyramid Credit Repair, Credit Saint, and Lexington Law.
What Do Fraudulent Credit Repair Agencies Promise and Deliver?
If you decide to work with a credit repair service, choosing a legitimate operation is essential. The unfortunate reality is there are many credit repair scams out there.
Generally, if a company promises to remove all negative information from your credit report, it’s a fraud. Credit repair agencies can only remove inaccurate information from your report. They can’t remove anything that’s legitimate information.
If a credit repair company promises more than they can legally deliver on, then steer clear.
Additionally, fraudulent credit repair agencies often promise to dispute items that you couldn’t on your own. But as a consumer, you have the right to file disputes yourself. Although working with a credit repair service can be helpful, it shouldn’t be presented as the only option to remove mistakes from your credit report.
Top Five Bad Credit Repair Company Warning Signals
Credit repair services are useful. But working with a fraudulent company can be a waste of time and money. Here are the warning signs to look for in bad credit repair companies.
Pressure to Pay Upfront Fees
If a company wants you to make a payment before they start repairing your credit, that’s a red flag. According to the Consumer Financial Protection Bureau, a credit repair company should not request or receive fees until they deliver on the promised actions.
You should steer clear of a credit repair service asking for your payment upfront.
Ongoing Fees Without Value
In and of itself, an ongoing fee is not a red flag. But if the ongoing fee doesn’t come with any value, that’s a problem.
As a customer, it is important to critically evaluate credit repair services. At a certain point, you won’t need to continue with credit repair services. After all, the goal is to remove fraudulent information. When that information is removed, it’s time to move on.
Too Many Promises
If a credit repair company is offering to remove accurate information from your credit report, that’s not a good sign. Although you want negative information off of your credit report, you cannot remove accurate information.
When a company promises the removal of accurate credit information, that’s a big red flag.
Bad Customer Reviews
Of course, all credit repair agencies highlight positive feedback on their website. But you should dig a bit deeper when considering any particular credit repair agency. Check out customer reviews with Trustpilot or the Better Business Bureau.
Customers won’t have nice things to say about fraudulent companies.
Advertises CPNs
Avoid any companies advertising CPNs.
A CPN is a Credit Profile Number, Consumer Protection Number, or Credit Privacy Number. No matter what the nine-digit number is called, it is marketed as a replacement for your Social Security number.
But CPNs are not real credit solutions. Instead, it is a scam that promises customers a clean slate when it comes to their credit reports. Unfortunately, no such silver bullet exists.
If you spot any of these red flags, move on to your next option. You don’t want to get caught up in a credit repair scam.
Fraudulent FTC Cases on Credit Repair
Fraudulent credit repair schemes are relatively common.
In one recent credit repair scam, the FTC found that Turbo Solutions Inc. was making a litany of false promises to remove all negative information from customer credit reports. Beyond the illegal promises, the Texas-based operator was filing fake identity theft reports to remove unwanted information from credit reports.
Another similar case was prosecuted against Atomium Corps Inc. and Startup Masters NJ Inc. by the FTC. Both fraudulent credit repair companies promised consumers the removal of all negative items and ‘hard’ inquiries from credit reports. Plus, the companies required upfront payment.
In both cases, the companies made illegal promises that they were unable to deliver. You can avoid working with a fraudulent credit repair company by looking for the warning flags we discussed above.
FAQs About Credit Repair
What Is the Average Cost of Credit Repair?
On average, you can expect to pay between $30 to $200 per month for credit repair. The process can take several months. With that, make sure to consider this cost ahead of time. Remember that you can pursue the DIY credit repair route for free.
What Is the Fastest Way to Repair Your Credit?
Credit repair is one part of a successful credit improvement strategy. Since credit repair can only remove negative information, you should consider combining this tool with other strategies.
A few other ways to improve your credit include paying off debt and making on-time payments. When multiple credit strategies are used together, you’ll see the most effective results.
Guide to Identifying a Bad Acting Credit Repair
Responsible credit repair can be a boon to your personal financial situation. A better credit score can unlock lower rates and better loan options.
But you’ll need to be careful to avoid a fraudulent credit repair experience.
As you explore your credit repair options, avoiding bad actors is critical. If you spot a credit repair service promising to remove all negative information or requiring upfront payment, avoid it. There are plenty of reputable credit repair agencies ready to work with you.
