Poor credit will cost you. You know that, and so do the credit repair companies that advertise on late night TV. Or with roadside signs that scream, “Repair Bad Credit $299.”
The credit repair business crawls with scammers who make empty promises. Should you stay away from credit repair companies? Maybe not. We’ve investigated when to use a credit repair company. We also compared each company to see who offers the best services. This is what we learned.
Who should avoid a credit repair company?
If you have a few obvious errors on your credit report, try one round of DIY credit repair. It can be simple, and the cost savings can be significant. An quick online dispute could be all you need.
People struggling to make payments on current debt shouldn’t work with credit repair companies. They won’t help you. Most credit repair companies have a debt counseling branch, but you have to pay for the advice. Real credit repair start with paying your current debts. Work on that before you even consider hiring a credit repair company.
Finally, avoid credit repair companies if you’re trying to remove information that is more than 3 years old. After 3 years, most negative information has a negligible effect on your credit score. Instead focus your attention on building good credit.
Who should consider a credit repair company?
Plenty of people can benefit from the services of a credit repair company. If you’ve been the victim of identity fraud, credit repair companies can help you clean up the mess. Oftentimes, the identity theft victims need to work with many creditors and the credit bureaus. The Federal Trade Commission outlines more than 20 steps that Identity Theft Victims may need to take. Of course, you could take all these steps on your own. However, a credit repair company can save you time. It might be worth the money to you.
Another group who should consider credit repair are those with duplicate entries on their report. If you had an item in collections, collections companies may have bought or sold the debt half a dozen times. Creditors aren’t supposed to duplicate negative information, but they sometimes do. You can dispute collections items on your own, but a pro might have more success.
Finally, a credit repair company can act as a translator. Sometimes it feels like the credit bureaus speak a different language. A good credit repair company will help you understand what a credit bureau is saying. They will also help you make your case in a way that creditors and the credit bureaus will understand.
What should you expect a credit repair company to do for you?
An excellent credit repair company won’t use a a machine gun where a scalpel is the right tool. Real credit repair companies don’t dispute everything in your credit report. Instead, they focus on information that is false, unfair or misleading. A representative of the company will work with you and for you.
Expect the credit repair company to create an individualized plan for you. During an initial consultation, they will help you understand your credit report. They will explain how they plan to approach credit repair in your case.
Once the credit repair company reveals the plan, you can expect them to start working it out. They may send dispute letters to the credit bureaus. They may get into contact with your creditors. Some credit repair companies will negotiate pay for delete deals with your permission. Others will not. Either way, you should expect the credit repair company to stay in contact with you. With each victory, you should see your credit score rise a little bit.
But credit repair companies aren’t reactive. Most credit repair companies will give you advice on how to proactively build credit. They’ll explain the types of loans you need, and how to get them at a low cost.
What are some red flags?
The credit repair industry is rife with scammers. Plenty of so-called credit repair companies dispute all the information in your credit report. Meanwhile, they don’t teach you to improve your credit. This carte-blanche approach sends up red flags to the credit reporting agency. They may not investigate any information because they don’t think your dispute is valid. Needless to say, these credit repair companies won’t repair your credit.
So what can you do to find a decent credit repair company? Avoid these red flags.
- Avoid companies that promise to raise your score by a certain amount.
- Avoid companies that require you to pay in advance if they haven’t done anything for you.
- Avoid companies that dispute all the negative information in your report.
- Look for companies that work with your creditors and with the credit bureaus.
We’ve investigated the credit repair companies with the biggest online presence to explain their value proposition. Using the information below, you can see if one of the credit repair companies fits your needs.
Best Credit Repair Services
|Lexington Law||$79.95- $119.95||Works with creditors and credit bureaus. You can cancel service at any time. Customers report significant credit score increase.|
|The Credit People||$59 per month or $299 for a six months. More on pricing here.||Free credit reports and scores. Online tracking portal. Work primarily with customer and credit bureaus.|
|CreditRepair.com||$99.95||Work with credit bureaus and creditors. Provide online dashboards and score tracker analysis.|
|SkyBlue Credit||$59. Learn more about pricing here.||Work primarily with consumers to build credit, and dispute with credit bureaus (sometimes multiple times). Emphasis on personal service.|
|CreditSaint Credit Restoration||$49.99- $99.99. See more information on pricing here.||Credit Saint works with creditors and credit bureaus to remove questionable items. The package you choose determines how aggressive Credit Saint will act in the fight for restoration.|
|The Credit Pros||$50 per deletion or $75 for public records removal. Learn more about pricing here.||Work with creditors and credit bureaus. Only pay for negative items that are removed.|
|Credit Solution Experts Inc.||Pay for deletion ranges from $10-$250 depending on difficulty. See more information on their model.||Work with credit bureaus and creditors to ensure 100% accuracy and compliance with federal laws. Only pay for negative items that are removed.|
As you can see, some of these companies have many complaints with the Better Business Bureau. Although the BBB Rating isn’t the only way to judge a company it is an important criteria to consider.