Should You Use A Credit Repair Service?
If you have tried to improve your credit score, you may be considering hiring a credit repair service to help you. These companies aim to strengthen your credit by disputing outdated or incorrect information on your credit reports, tracking results, and monitoring to make sure errors don’t reappear.
Credit repair can cost around $ 100 per month and take several months, with no guarantee that your credit score will be higher in the end.
Note that credit repair can’t do anything you can’t do on your own, and it can’t remove negative marks of your credit reports if they are accurate, timely and verifiable.
Know how your credit is rated
See your free score and the factors that influence it, as well as information on how to keep building.
Is Credit Repair Legal?
There are legitimate companies providing credit repair services, but the area is also notorious for scams, so it is important to check out any company you are considering hiring.
The Federal Trade Commission cautions against using credit repair services that guarantee they can remove accurate negative information or say they can help you establish a new identity using a credit privacy number.
The Credit Repair Agencies Act requires companies to provide you with a firm total of costs and an estimate of how long it will take to get results. It also gives you three business days to cancel the services free of charge.
A reputable company should coach you on how to manage your existing credit accounts to avoid further damage. Moreover, a reputable company will not guarantee a certain result or encourage you to lie.
What Can Credit Repair Services Do?
Legitimate credit repair services check your credit reports for information that shouldn’t be there and dispute it on your behalf. Many of them also verify that the information does not reappear.
When information on your credit reports is disputed, the credit bureaus have 30 days to investigate. However, they do not have to investigate disputes which they deem “frivolous”.
Among the errors that can be corrected:
Accounts that don’t belong to you.
Bankruptcy or other legal actions that are not yours.
Spelling mistakes, which can mix with negative entries belonging to someone with a similar name – or can mean that positive entries don’t show up when they should.
Negative marks too old to be included.
How much does a credit repair cost?
You pay a monthly credit repair service fee, typically $ 69 to $ 149, and the process can take several months to a year. You can also pay a setup fee to get started.
Sometimes credit repair services are offered in tiered packages, adding related services, such as credit monitoring or accessing credit scores, at higher tiers.
How can I repair my credit myself?
Start by checking your credit reports with the three major credit bureaus – Experian, Equifax and TransUnion – in using AnnualCreditReport.com. Then follow these steps:
Look for information that is accurate but cannot be substantiated. Unverifiable information should be deleted, although it can be reinstated if verified later. An example could be a debt owed to a retailer that has gone out of business; unless the retailer sells the debt to a collection agency who can prove ownership, it may be unverifiable.
Work on your payment history. Your record of paying bills on time is the most important factor affecting your credit score. Missed payments can lower your score.
Use less of your available credit. The portion of your available credit card limit that you use is known as the credit utilization rate. The lower it is, the better for your score. If you can afford it, consider making several small payments during the billing cycle, as well as others. strategies to reduce credit use.