Your credit has a huge impact on – let’s just be honest – your whole life. Less than perfect credit can affect your ability to buy a home, to buy a car, or even to rent an apartment or be qualified for a job. If you’ve been struggling to bring your credit score up, you may be looking into credit repair agencies.
Are credit repair agencies worth the cost, though? Can these people really help you bring your credit score up? Here’s what you need to know about credit repair, and hiring a credit repair agency.
What do Credit Repair Agencies Do?
When you hire a credit repair agency, the first thing they’ll do is obtain a copy of your credit report from all three reporting agencies. In case you’re not familiar, those bureaus are TransUnion, Equifax and Experian.
From there, the credit repair agencies will dispute negative information, and will work to remove negative items from your report. In some cases, you may be able to pay the credit repair agency to work with your creditors to negotiate settlements. That, however, is usually left to debt settlement services.
Credit repair agencies may take anywhere from a few months to a few years to get your credit score up to an acceptable level. In the meantime, you’ll usually still be required to work toward paying down your debt.
So do credit repair agencies really work? Is it worth it to pay these agencies money if you still have to pay your bills?
Should You Hire a Credit Repair Agency to Fix Your Credit?
Is there anything a credit repair agency can do that you can’t do yourself? Absolutely not. You have a right to obtain your credit report from each of the three bureaus once per year. You can also access a free copy if you’ve been denied credit. Your denial letter will list the bureaus from which your report was pulled.
You, yourself, can dispute negative and incorrect items on your credit report. In fact, you can do this online in most cases. These disputes can be made via the credit bureaus or through third party sites like Credit Karma and others.
That said, that’s a lot of work. You’ll spend a lot of time writing letters and making phone calls to your creditors. In most cases, you’ll need to provide proof that the information is incorrect, or that the bill was actually paid. Who has time for that, right?
In some cases, credit repair agencies can be very effective at raising your credit score with minimal work on your part. They’ll contact creditors on your behalf, removing negative items and disputing debts.
Before you give your credit card information to a credit repair agency, it’s important to know that, along with the benefits, there are risks associated with these agencies. Here’s what you need to know before you hire a firm to help with your credit.
Credit Repair Agencies: The Risks
The first risk to hiring a credit repair agency should be fairly obvious. That is that there’s no guarantee they can actually improve your score. If you have outstanding debts, the easiest way to get those items removed from your credit report is by paying your bill.
The second risk is the speed at which these agencies operate. Most credit repair companies will offer a certain number of disputes each month, for a flat fee. For instance, an agency may promise to make 15 disputes each month.
What’s the reason these agencies won’t dispute, say, 25 items, if there are that many on your report to dispute? Well, the answer is simple. These credit repair agencies charge by the month, and they want you to retain their services as long as possible.
Finally, there are “credit repair agencies” out there that will do literally nothing but take your money. These are scams, obviously. Before you hire a credit repair agency, be sure you check them out with your state’s Attorney General office to be certain they’re licensed. It’s also a good idea to check with the BBB to see what kind of reviews these agencies get.
The Best Credit Repair Agencies
Are you ready to hire a credit repair agency to help you get your credit back on track? Following is a list of the best credit repair agencies, based on consumer reviews.
Consumers who used CreditRepair.com had largely positive things to say about the company. The credit repair agency estimates a 40 point increase in your credit score over the first four months of membership. Many customers said they saw more of an increase even than that.
The service costs $99 per month, and an additional charge of $15.00 for your TransUnion credit report. (Remember, you can get this for free on your own, once per year.)
The Credit People
The Credit People get great reviews because of the relatively low cost of the service. This credit repair agency offers a one week trial at $19, then the service costs $79 per month after that.
The service The Credit People provide is less comprehensive than some other credit repair agencies. The Credit People will give you a free consultation, letting you know what on your credit report should be addressed. Then, they’ll dispute negative items on your report for you.
The Credit People offer services to individuals, and offer discounts to married couples.
Consumers have a love-hate relationship with Lexington Law. If you’ve ever surfed the web, there’s a good chance you’ve seen advertisements for this company, as it’s one of the biggest credit repair agencies in the country.
The company has grown to great success because they actually do get results.
However, customers complain that Lexington Law takes a very long time to get positive results. They limit the number of disputes they’ll initiate in a given month, and of course are charging the consumer all the while.
If you’re serious about improving your credit andhave a little extra cash to spend, Lexington Law might be a good option for you. Services range from $90 per month to $130 per month.