How to Find a Trustworthy Credit Repair Service
The credit repair process is as much of an art as it is a science, and no two individuals’ time requirements will be the same. It will always require at the very least 30 days to do, but can easily take up to six months and even longer. This time frame all depends on the prior condition of your credit profile.
If you only have a couple of inaccurate items that are holding back your score, this can be fixed far quicker than a lengthy history of defaults and delinquencies can. If you are prepared for it to require three months, then you will likely not be too disappointed if it runs another month or two over this.
What will happen if all of the negative items on your credit reports are accurate?
Usually such accurate negative information can not be taken off of a credit report. You could pay off a delinquent or charged off account, and this would result in the account status simply being updated to reveal that it has been paid in full. Unfortunately, accurate derogatory remarks like charge offs and late payments will follow your credit report around for seven years from the first delinquency date. That is of course unless you employ a skilful credit repair company which is practiced in negotiating to have such remarks removed by the original creditors and lenders.
There are extenuating circumstances in which such negative items can be removed. If the creditor made a billing error somewhere, then you can force the creditor to contact the credit reporting bureaus to take the account completely off of your credit report. If you challenge the debt and the creditor can not substantiate it with original documents that prove its validity, they will also be forced to get it removed.
As a general rule, this is far more likely with a home foreclosure than it is with a credit card bill.
How Much Do Credit Repair Services Cost?
Each credit repair service will have its own price or tier of pricing to work on your credit reports. In general, they will charge you by the month and only after they have completed the months’ work. According to NerdWallet, the average professional credit repair service costs around $100 per month.
Other companies may charge a one time, lump sum amount of $300 for six months of credit repair. If you have a lot of items that need to be addressed on your credit profile, you might save money by paying such a lump sum, as more than six months of credit repair services could otherwise cost you in excess of $600 (and this amount of time to fix credit reports is not unheard of).
You could pay as little as $30 per month to one of these companies, but beware that you generally get what you pay for with credit repair (as well as in most areas of life).
How Do Credit Repair Companies Work?
Legitimate credit repair companies do many things on your behalf to improve your credit reports and scores. They will usually begin services by asking for current copies of your credit reports from all of the big three consumer credit reporting bureaus Experian, Equifax, and TransUnion. Once they have obtained these complete reports, they will then go carefully through your reports looking for any derogatory remarks such as delinquent accounts and charge offs, collections accounts, and bankruptcies.
Their next step is to create a specific plan for the best way to dispute any errors and negotiate with your individual creditors with the ultimate goal of getting such items removed. Such a plan of attack could include sending out letters that make requests for debt validation, dispatching dispute letters for inaccurate negative comments, and making contacts (in writing) to collectors ordering them to cease and desist their collections efforts against you.
These companies will also encourage you to get proactive as part of their plan. They will recommend that you apply for one or more new credit accounts in order to have new positive information updates included on your credit reports. Only be sure that you are able to make timely consistent monthly payments on any new accounts added so that you do not make your fragile credit situation any worse. It is not always a sensible approach to seek our more credit that you do not need.
Also beware any credit repair service plans that are big on trying to get accurate negative information removed from your reports. Unless they uncover accounts where the creditors will not be able to verify and validate the original debts, they will not be able to get these removed from your reports (absent negotiating to pay them in full).
Is Credit Repair Legal in All 50 States?
Credit repair services are legal in every state of the U.S. Thanks to the Fair Credit Reporting Act, you have the right to make certain that all of the information contained in your personal credit files is completely accurate. This does not mean that every credit repair company under the sun is above board though. In fact the opposite is more likely to be the case.
Thanks to the two primary credit repair federal laws the Fair Credit Reporting Act and the Credit Repair Organizations Act (and other important legal sections 609 and 611), your rights to fix credit mistakes in your reports are guaranteed as a consumer. Each state also maintains its own host of statutes for regulating credit repair services and the industry as a whole.
How Can You Verify the Legitimacy of a Credit Repair Company?
The easiest and fastest way to check out a credit repair company’s legitimacy and all around reputation is to go to the Better Business Bureau website and enter their name. The BBB maintains ratings and complaints on these companies which can save you the cost and heartache of getting involved with a credit repair scammer.
If you want to spend more time, you can familiarize yourself with the Credit Repair Organizations Act to know what signs to look for in a crooked company which is propagating scams. You should always strenuously avoid those credit repair companies that break the law by asking for payment upfront in advance, who promise to make you a new credit identity, or who guarantee that your credit score will rise as a result of their efforts.
Besides the monthly fee to work on your credit reports and profile, most legitimate companies will also assess a one time customer intake fee to get started. This helps them to cover the costs of obtaining all three of your full credit reports. The customer intake fee could easily run as much as from $100 to $200, depending on the company and its procedures.
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