A credit repair service company challenges inaccuracies that are hurting your credit score. If indeed there are errors, paying for credit repair services could drastically improve your credit score. The process takes months and most of these companies charge a monthly fee ranging from $69 to $149. Besides challenging past information, some companies include ongoing monitoring as part of their services.
Before settling for one, it’s important to read enough credit repair company reviews.
The Federal Trade Commission regulates the activities of credit repair service companies. The commission categorically warns credit repair companies against giving guarantees to prospective companies when pitching their services. Indeed, no credit repair company can give any promises since your creditors are the ones who establish the legitimacy of all claims against you.
How Credit Repair Works
Credit repair companies write to credit bureaus challenging the legitimacy of clients’ purported debts or other negative information. Credit bureaus have 30 days to investigate and respond.
The most successful challenges are those highlighting clerical errors. For instance, a person may have an account erroneously associated with them. The same may be true for bankruptcy cases being included in your credit score erroneously, perhaps because of a mix-up of names or a data entry mistake.
It’s also possible to challenge old information that is still included in a person’s credit score beyond the statutory period of 7 or 10 years. Unverifiable debts can also be expunged from your credit score.
Can You Do It Yourself?
You can do most of what credit repair service companies do by yourself. Credit bureaus have a dispute channel on their website. You can write to them and provide all the necessary information to make your case. When doing so, remember that credit bureaus quickly dismiss frivolous complaints.
The best approach is to find negative information that’s inaccurate and challenge it. Next, find negative information that is accurate but unverifiable. This two-pronged approach can improve your credit score in the short term.
Paying a credit repair company when some of the negative information is nearing time for removal is not worth it.
Most companies just challenge all negative information on your report without regard for accuracy. This is a misuse of process under the Fair Credit Reporting Act. In fact, credit repair company reviews from a lot of users prove this is true. You can learn more about Lexington Law and how people perceive their services
Alternatives to Credit Repair Services
If you have legitimate outstanding debts, the best option would be to pay them in full or negotiate a settlement with the creditor. However, negotiated settlements do not look good on your credit score, but at least you will clear your name.
In the long run, however, you need to learn how to be more responsible with credit. Do not take up credit for non-essential things. Always consider the risk that comes with taking up new credit. Many people mistake credit cards for emergency funds. They are not the same. Building an emergency fund takes time, but it allows you to solve unforeseen problems without incurring interest expenses.
Develop a personal budget and stick to it. Eliminate those things that you’ve been paying for but do not really use. These include service subscriptions, such as music and video streaming. You can pause and only renew them when you have some free time to enjoy them. Next, find major cost items you can substitute with cheaper options. Cooking at home is almost always cheaper than eating at restaurants.
Good credit repair company reviews result from helping clients adjust their money management habits to improve credit scores. There are no legal maneuvers that can remove accurate negative information from peoples’ credit scores.
Financial discipline is the best tool for a good credit score.