credit report repair services help consumers clean up errors on their credit reports that may be hurting their score. They typically review the consumer’s reports, identify inaccurate information and then send letters to the credit bureaus and/or data furnishers to dispute the errors. The company then updates the consumer on progress through a user-friendly dashboard and online account. Many of these services also provide educational materials, workshops and/or one-on-one credit coaching to educate consumers on their credit.
Inaccurate information on credit reports is very common, and it can negatively impact a person’s ability to get loans or approvals for credit cards. However, it is possible to correct errors on your own for free by disputing the incorrect information. There are also several nonprofit organizations that offer free or low-cost credit counseling to help individuals with poor credit improve their financial standing through responsible spending habits and establishing positive payment histories.
Before selecting a credit repair service, make sure to carefully research the company and read reviews of past clients. Look for red flags such as companies that demand payments upfront or promises that sound too good to be true. It is also important to note that credit repair agencies cannot guarantee they can remove negative information from a report, and it’s illegal for them to charge you for services that haven’t been fulfilled yet.
Reputable credit repair services should also follow the Credit Repair Organizations Act (CROA), which requires them to give consumers a contract describing their specific services and a copy of “Consumer Credit File Rights Under State and Federal Law.” Additionally, they must give their clients access to monthly credit reports, a dashboard where they can track their progress, and education and guidance on how to maintain a good credit score.
The majority of credit repair companies charge an initial fee, which is used to set up the consumer’s account and begin work on their behalf. Once the account is established, they usually start by reviewing the consumer’s reports and identifying any inaccuracies. They then contact the credit bureaus and/or data furnishers that supplied the information to request verification of the accuracy of the information. If the disputed item is determined to be erroneous, it must be removed from the report.
In addition to disputing errors on credit reports, legitimate credit repair agencies will often negotiate with creditors on behalf of their clients. This can involve negotiating debt settlements or setting up payment plans to resolve delinquent accounts. These types of arrangements can often lead to a higher credit score and more borrowing power in the future.
As with most things in life, there is no quick fix for bad credit. The best way to repair a credit score is with patience and persistence. It will take time to remove inaccurate items from a credit report, and you must continue to address the issue going forward by adopting responsible spending habits and maintaining healthy payment histories. If you’re not seeing results within a reasonable amount of time, it’s a good idea to speak with the credit repair company about your concerns.