Bad credit scores may seem insurmountable until you come across an advertisement for a credit repair company. These companies offer to assist you in repairing your credit, so all you have to do is write them a check and wait. But here’s the truth: credit repair services are expensive, and you’re paying for something you can accomplish on your own.
Before choosing a credit repair company, learn the ins and outs of credit repair.
1. What Is Credit Repair?
Credit repair companies assist you in removing inaccuracies from your credit report in order to raise your credit score.
Some credit repair companies provide additional services in package upgrades, such as free credit score updates, sending stop and desist letters to debt collectors, and even writing letters of reference to any lenders with whom you’re seeking a loan.
These added services, however, aren’t always worth the increased prices. A letter of reference from a credit repair company, for example, is unlikely to convince a lender. You can also access your credit score for free online, and you may draft your own cease and desist letters using internet templates.
2. Can You Pay to Have Your Credit Repaired?
Contrary to what the term implies, you cannot just pay for a high credit score. This is because credit repair companies can only assist in removing mistakes; they can erase detrimental information but it has to be accurate.
For example, if you’ve made multiple late payments, defaulted, have a significant credit card amount compared to your overall credit limit, or have other typical derogatory marks that are real, credit repair agencies can’t help you.
3. How Much Do Credit Repair Companies Cost?
Depending on the company, credit repair services often charge in one of two ways. Some companies use a pay-per-delete strategy, charging you for each inaccuracy they may erase from your credit report.
Credit repair companies, on the other hand, are more likely to adopt a subscription-based approach, with prices ranging from $50 to $150 each month, depending on the package. You may also be required to pay a starting charge (sometimes known as a first-work fee), which may be the same as the cost of a full-month membership.
Most credit repair companies have strategies in place to keep you signed up for many months. Some companies restrict the number of deletes they will assist you with every month, requiring you to remain signed up for a longer period of time if you have several problems. Other companies provide credit score updates, and since it might take several months for your score to update, they urge you to remain signed up (while paying monthly fees) until you see the improvements reflected on your credit report.
In any case, it’s a costly road to take. If you have to pay a $100 first-work charge plus $100 per month for six months of credit restoration services, you’re looking at paying $700 for something you could accomplish on your own.
We are a bit different from a standard credit repair company, we don’t require a mandatory start-up fee and we are able to address all of your negative remarks at once.
4. Keep an eye out for Credit Repair Companies Scams
One of the most terrible aspects of credit repair companies is the presence of fraudsters amid reputable businesses. Here are several red signals to be aware of.
5. You Can Pursue DIY Credit Repair
You can restore your own credit for free, and you don’t have to pay someone to do it. To do so, follow these five steps:
AnnualCreditReport.com allows you to get a free copy of your credit report from each of the three agencies.
- Go over each page and mark any problems you see.
- Send a dispute letter to each credit bureau for each error you find.
- Wait for the credit bureau to respond to its decision.
- Re-evaluate your credit score in a month or two to determine whether it has altered (not all errors will affect your credit score).
If you are seriously perplexed about your credit condition, try dealing with a credit repair specialist who can assist you in getting back on your feet for a modest charge. Credit Cadabra is an excellent resource for locating a trustworthy credit repair specialist.