Credit fixing companies help consumers improve their credit scores by disputing errors with credit bureaus and creditors. They often charge a setup fee followed by monthly payments to spread out the cost of their services. However, there are other ways to repair your credit without paying for a third party to do it for you. You can check your credit report for errors and contact lenders directly to resolve any issues on your credit reports, as well as work to build up a positive score over time by opening new accounts, reducing credit card debt and keeping a low credit utilization ratio.
A good credit repair company will review your credit report, identify any inaccurate information and then send letters to the credit bureaus asking them to remove the erroneous items from your file. They will also usually interview you and request documents to verify the accuracy of the disputed information. Credit repair agencies should not guarantee a specific increase in your credit score or charge upfront fees, and they should clearly explain what their services will involve. It’s also a red flag for a company to discourage you from contacting credit bureaus directly or ask you to misrepresent information on your reports by creating a new identity.
There are several popular credit repair companies in the United States, including Lexington Law, Credit Saint and The Credit People. Each offers different packages to suit a range of budgets. Some have a money-back guarantee in case they are unable to fix the problems on your report, while others can suggest other methods you can use to repair your credit.
Many credit repair companies offer a 90-day money-back guarantee, but the Credit People goes one step further and lets you cancel your service whenever you like. They also refund your last month of payments and the previous month’s payment, which is a rare feature among credit repair companies.
It can take between three and six months for a credit repair company to start making an impact on your credit, depending on the amount of negative marks on your report and how long it’s been since you last looked at your report. However, the most effective companies will work on your behalf to remove inaccurate information and resolve any other issues that are hurting your score.
A credit repair agency will help you dispute errors with the major credit reporting agencies (Experian, Equifax and TransUnion), as well as the creditors who supply the information to the credit bureaus. These errors might include tax liens or foreclosures that don’t belong to you, duplicate accounts, old bankruptcies or outdated information. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputes within 30 days and delete erroneous information from your report.