Credit repair is a process that can help you improve your credit score. This process involves contacting a credit reporting agency and disputing items on your report. If the bureau finds the item in question is inaccurate, it will be removed from future reports. The fastest way to improve your credit is to pay down past due accounts and avoid making future missed payments.
There are many companies that promise to repair your credit. However, before you sign up, make sure you research the company first. You want to be sure that it can really help you, and that you don’t have to spend a fortune in order to get your credit back on track.
The Consumer Financial Protection Bureau warns consumers not to fall for credit repair scams. One of the most common mistakes people make is signing up for a credit repair service without knowing exactly what they are getting into. Some companies offer a flat fee for the entire task, while others charge a monthly fee. Most credit repair services require a one-time setup fee and a monthly fee.
The initial setup fee may be as low as $10, but it can range from $30 to $150 per month depending on the company you choose. You can also opt for a higher membership tier, which will typically include more features. A more expensive tier will also include an analysis of your credit score, a cease and desist letter to debt collectors, and more.
Despite the promises of credit repair companies, there is no magic formula for fixing your credit. It takes time, effort, and a commitment to your finances. Also, it isn’t always easy to spot a red flag.
Some companies will claim to be able to perform all of the work, but will be happy to keep all of your money if things don’t improve. Moreover, most companies are not licensed to do anything that you cannot do yourself.
While you can do much of the credit repair work yourself, it’s usually better to leave the more complex tasks to a professional. Credit repair companies have established relationships with creditors, and you’re unlikely to be able to successfully negotiate with your creditor to resolve your dispute on your own.
The other benefit to hiring a credit repair service is that they can be more thorough in addressing errors on your report. They can also help you take other steps to improve your credit. For example, if your score is low and you want to start building your credit, a credit repair company can provide the tools and expertise you need to improve your credit.
Choosing a credit repair company is a smart decision. Many companies will charge a monthly fee, but will not do any work until you agree to pay up front. Other companies will charge a hefty upfront fee, but won’t be willing to answer your questions.
The Fair Credit Reporting Act gives you the right to dispute any inaccuracies on your report. Once your dispute is processed, you’ll be sent a notice in writing from each of the three major credit bureaus. At that point, you’ll have thirty days to follow up on your dispute.