When selecting a credit repair company, not knowing where you stand or even not knowing what to look for could place you and your money on a very tight rope.
Credit repair companies charge a fine dollar for their services, and knowing what you’re up against beforehand puts you in a good position to own the process and get everything you need as a result.
The first step is determining if you actually need credit repair. A few good reasons to seek out credit repair companies include having a low credit score, recent bailouts/defaults on your credit cards or other installment loans, defaulting on a mortgage or auto loans, bankruptcy, foreclosure, but most importantly, seek out these services if you find there is wrong or inaccurate information on your reports.
Improving your credit score can lead you to live a much more fulfilling life, allowing you to focus on using your money wisely and building a solid back-up plan for those rainy days.
What are typical errors that can be fixed with a credit repair agency?
- Accounts/loans/credit cards that don’t belong to you
- Bankruptcy or legal actions that don’t belong to you
- Misspellings, which can mix in negative entries from someone with a similar name
- Negative marks that are too old (7+ years) to be included in your report
- Debts that can’t be validated or verified
Is there a way to do all of this yourself?
The short answer is yes. Each credit bureau has different methods for disputing the information found on your credit report. Meaning that, if you have the time (and willingness) to do this yourself, you could start a dispute with customer service to begin cleaning up your credit reports.
What does a credit repair agency do?
Credit repair agencies/professionals specialize in finding and disputing mistakes or errors on your credit report. These companies typically charge $79 – $155 dollars per month and some may include set up costs as part of your agreement.
When searching for a credit repair agency, it’s very important to find companies with a solid background and reputation, so look for customer reviews or ratings that provide reasonable guarantees that their services are worth utilizing.
Typical features of most credit repair agencies are:
- Monthly dispute options: can range from 5 to unlimited dispute requests per month
- Escalated information requests: expedited handling of requests/disputes
- Dispute monitoring and resolution: dedicated support team that will include you in updates regarding your disputes
- Identity theft restoration insurance: help restoring your identity after a data breach
Things to know before embarking on your credit repair journey:
- It takes time: anywhere from 3 months to a year if negative/incorrect items are found on your reports.
- Not everything can be removed: otherwise correct information cannot be removed unless it is expired (older than 7 years)
Here are some immediate benefits to having good credit:
Saving on interest: a higher score will typically mean a lower rate of interest, although many factors go into determining your interest rates for certain types of purchases.
- Saving on interest: a higher score will typically mean a lower rate of interest, although many factors go into determining your interest rates for certain types of purchases (Includes insurance, credit card rates, car and mortgage loans, etc.)
- Higher credit limit: having a good score means you are in technically good terms with banks, lenders, and credit card companies, meaning they will more easily allow you to increase your credit limit or request new credit.
- Better chance of approval: your excellent credit score will hint at lenders that you’re a good borrower, although they still typically look at other factors like income and debt.