Are you considering a credit repair company to help get your credit health back on track? If so, you may be wondering if it’s a worthwhile investment that can truly save you time and help you get the results you’re seeking.
As you explore credit repair options, keep in mind that the process and its results might take some time, with simple corrections taking a month or two to complete. In addition, costs can vary widely depending on the company and the services you choose. Here’s what to know so you can feel confident when searching for a legitimate credit repair company to help you reach your credit goals.
What Do Credit Repair Companies Do?
Credit repair companies aim to help you improve your credit score by disputing inaccuracies and outdated information appearing on your credit report. They file disputes with the three major credit bureaus – Experian, TransUnion and Experian – to have errors that could be hurting your credit score removed or updated.
Here’s an overview of how the process works:
- The credit repair company starts by accessing and reviewing your credit report from the three credit reporting agencies.
- The credit repair company takes note of any negative credit items that are damaging your credit rating. These include late payments, collection accounts and charged-off accounts.
- The credit repair company devises a customized plan of action based on their findings to address the negative entries listed in your credit report.
This plan could include disputing inaccuracies directly with the credit bureaus and information furnishers (i.e., creditors and lenders) or providing you with tailored guidance on the most effective ways to improve your credit health. Some credit repair companies will also negotiate with creditors or lenders to remove accurate negative information in exchange for payment – this strategy is known as a pay-for-deletion.
Be mindful that credit repair companies are not miracle workers, and they can’t erase legitimate negative items or debt from your credit report. You’ll also pay a monthly fee to patronize their services, and some credit repair companies charge a flat rate for each item that’s removed.
While working with a credit repair company can be helpful, know that you can also take action to improve your credit score on your own. You have the right to dispute errors directly with the credit bureaus and can employ similar strategies to those used by credit repair companies.
Understanding the Credit Repair Organizations Act
The Credit Repair Organizations Act (CROA) is a federal law designed to protect consumers from deceptive practices employed by shady credit repair companies. By understanding the CROA, you can better assess the legitimacy of credit repair services.
Under the CROA, it is illegal for credit repair companies to:
- Make misleading or false claims about their ability to improve your credit
- Demand upfront payment before completing the services they’ve promised
Credit repair organizations must also:
- Furnish you with a written contract detailing the services they will perform, the fees they will charge and the time frame in which they will complete the services
- Allow you a three-day window to cancel the contract without any penalty
Be cautious of companies that try to circumvent these requirements by structuring monthly payment plans to avoid the no upfront payment rule. Shady companies may also discourage you from contacting credit reporting agencies directly while working with them.
By staying informed about the regulations under the CROA, you’ll be in a better position to evaluate the legitimacy of credit repair companies. Remember to stay vigilant and watch out for red flags if you decide to hire a credit repair company to file disputes on your behalf.
Are Credit Repair Companies Legit?
Credit repair companies can be a valuable resource when trying to improve your credit score. They offer specialized services to help identify and dispute inaccurate information on your credit reports. However, it is essential to work with legitimate credit repair companies to ensure your credit score improves each month.
When considering a credit repair company, look for those with a solid reputation, stability, and customer satisfaction. It is also important to keep in mind that credit repair services cannot guarantee specific results. The credit repair process takes time and effort – anywhere between a few months to several months or even a year, depending on what’s in your credit report.
What Are The Signs Of A Reputable Credit Repair Company?
If you’ve started researching credit repair companies but aren’t sure which are legit, here are some signs you should be on the lookout for:
They Know And Understand The Law
A reputable credit repair company employs individuals that are well-versed in laws that govern the credit repair process, such as the Credit Repair Organizations Act (CROA) and the Fair Credit Reporting Act (FCRA). They also act in compliance with these laws while working to improve their client’s credit reports. Furthermore, they ensure that you are informed about your rights under these laws.
They Inform You Of Your Rights
Being upfront about your rights is another key indicator that a credit repair company is reputable. As a consumer, you are entitled to know your rights under relevant credit laws, such as the FCRA and the CROA. A trustworthy company will not only inform you of these rights but also provide guidance on how to exercise them.
They Don’t Require Fees Upfront
Legitimate credit repair organizations don’t charge upfront fees. Instead, they will only bill you once they have performed the agreed-upon services. Charging fees before delivering results is a warning sign that a company may not be operating ethically or in compliance with the CROA.
They Don’t Promise To Delete Accurate Negative Information
Any credit repair company that guarantees to remove accurate negative information from your credit report is being dishonest. A legitimate company will work to dispute inaccurate information and provide guidance on ways to manage your credit health responsibly.
They Don’t Tell You Not To Contact Credit Reporting Bureaus
You have the legal right to directly contact the major credit bureaus and dispute inaccuracies on your credit report. In fact, a reputable credit repair company will not discourage you from doing so. Instead, they will work with you and support your efforts in communicating with credit bureaus.
They Provide You With A Contract/Agreement
One of the primary signs of a reputable credit repair company is providing a clear and comprehensive contract or agreement. This document should outline the terms and conditions of their services, the costs involved and the expected timeline for results. It should also include the necessary disclosures and guarantee your right to cancel the agreement within a specific time frame. Carefully review any contract before signing to ensure your interests are protected.
Credit Scams To Look Out For
When determining if a credit repair company is legitimate, it’s essential to be aware of the common warning signs of credit scams. Some of the red flags that should alert you when evaluating a credit repair service are the following:
- Upfront payments: One of the main signs of a credit repair scam is if a company asks you to pay before providing services. Legitimate credit repair services do not require payment upfront per the Credit Repair Organizations Act.
- Guaranteed results: Be cautious of companies that guarantee specific credit score increases or claim to remove negative information and items from your credit report, even if the information is accurate and current. Making these sorts of guarantees is illegal.
- Limited or unclear information: If a credit repair company is not transparent about their services, fees, or contact details, it’s possible they’re trying to hide something. Make sure you can easily access and understand the terms and conditions of its offerings.
- High-pressure tactics: Scammers often use high-pressure tactics to force you into making quick decisions. Be cautious of companies that pressure you to pay fees to “get to work” on repairing your credit score. Legitimate credit repair companies will not engage in such practices.
By keeping these warning signs in mind, you can avoid falling victim to credit repair scams and, instead, opt for reputable credit counseling or fixing your credit on your own. Remember, under the Fair Credit Reporting Act, you have the legal right to dispute credit errors yourself for free without needing to pay a credit repair company to do it for you.
How To Hire A Credit Repair Company
There’s no shortage of credit repair companies to choose from. So, comparing your options is vital to find the best fit.
Start by doing your research. Compare the companies you find based on their stability, reputation, customer satisfaction, experience, services and cost. Look for customer feedback and ratings to get an idea of their success rate. When reviewing a credit repair company’s pricing, keep in mind that rates can vary widely between companies. Some charge a monthly fee, while others charge a one-time fee for their services.
Next, find out what services they offer. A good credit repair company will work with the major credit bureaus to dispute errors on your credit report. They should also provide guidance and strategy on how to improve your credit score by managing your accounts, negotiating with your creditors and offering tips on building a positive credit history.
Also, be cautious of credit repair companies making guarantees that sound too good to be true. It’s equally important to understand the cancellation policy. Reputable credit repair companies will have clear terms regarding when you can cancel the service and any fees associated with canceling. Make sure you’re comfortable with these terms before signing up.
For example, The Credit Pros is a BBB-accredited company that lets you try their credit restoration services as they offer a 100% 90-day money-back guarantee. They also offer free consultations with no obligation to sign up, so you’ll get the assurance that they have your best interest in mind.
They are also committed to providing exceptional service and can help you with credit report corrections, increasing credit scores, or establishing credit. If you are interested in The Credit Pros, complete a short form or call (727) 306-8201, and a credit specialist will contact you to give you any information you need.
Remember, it’s crucial to research and choose a reputable credit repair company if you decide to go that route. Read reviews, check their credentials, and make sure to understand their pricing structure before signing up for their services.
