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What is Credit Repair?

Your credit score follows you everywhere you go. Companies run credit checks before you can buy a car, get a new house, or even get a new job. If your credit score isn’t where it needs to be, you might need to take steps to improve it before you need a new loan, home, or job. That could leave you wondering about credit repair services.

Before you choose credit repair, learn what it is, the pros and cons, and how to choose a company. You will also learn if it’s right for you.

How A Credit Repair Company

CAN Help

While some people try to fix their credit themselves, others turn to credit repair companies. Credit repair companies begin by accessing your credit report. They look at the derogatory marks on the report and then create a plan to get them removed.

They can go about this in different ways. If they see an error on the report, they will file a dispute. Errors range from incorrect personal information to accounts that aren’t yours.

If you have tax liens, bankruptcy, missed payments, or other negative information on your account, the credit repair company can negotiate with your creditors to remove it. If your creditors agree to it, the information will disappear from your account.

If your creditors haven’t updated your report properly, credit repair companies will take care of that, as well. Typically, this involves sending the creditors cease-and-desist letters.

If the credit repair company can get your creditors to remove the derogatory items, your score will go up. However, you will have to pay a hefty fee for this service. While some credit repair companies charge $50 a month, it’s not unusual to see companies charging as much as $150 a month for this service.

Credit repair is a pretty simple process, but it can take some time to complete. The company can likely review your credit report in a matter of hours. However, it might spend days drafting the letters. In some cases, it can take weeks to draft the letters if there are lots of items to dispute.

Then, the credit bureau has 30 days to review the claim. After the review, the credit bureau will reach out to the creditor and have it check for inaccuracies. You can expect to hear back from the credit bureau within five days of closing the investigation.

Sometimes, the credit bureau chooses not to investigate. This occurs when the claim appears to be frivolous and without merit. If the bureau makes that choice, you’ll find out within five days of the receipt of the claim.

Credit repair services do help some people, but they aren’t the right choice for everyone. However, some factors can make you a good candidate for this service. Ask yourself some questions to see if you’re a good candidate for credit repair.

First, have you noticed that your credit report has lots of errors that are hurting your score?

Do you want to have those items off your report, but you don’t have the time to put into the process?

Do you need to use your credit soon, so it’s important to resolve issues quickly?

Finally, can you afford a credit repair service?

If you answered “yes” to these questions, you might be a good candidate for credit repair.

On the other hand, you aren’t an ideal candidate if you have the time and resources to put into disputing inaccuracies.

Also, if you don’t need to use your credit anytime soon, it doesn’t make sense to pay a repair company. It also doesn’t make sense if you’re carrying high amounts of debt or your credit is bad due to missed payments and other legitimate factors. In both cases, you probably won’t see enough improvement to make it worth it.

If credit repair isn’t a good choice, that doesn’t mean all hope is lost. You can start rebuilding your credit slowly through debt relief and smart financial habits. Then, instead of just removing items from your report, you will position yourself to have good credit well into the future.

Credit repair has some benefits that make it attractive for some people. First, of course, the company handles the dispute process for you, saving you time. Because the staff is experienced, they might be able to negotiate the removal of legitimate derogatory marks. This could help your score.

You should also consider the drawbacks. First, there is the price. Some companies charge an extremely high price for this service.

Also, companies cannot guarantee that your score will improve. You could end up paying for a service that doesn’t help you at all.

You also run the risk of getting scammed if you hire a credit repair company. You need to conduct research before handing over any money.

Choosing a Credit Repair Service

If you decide to hire a debt relief company, you need to avoid scams. Follow these tips to ensure you choose the right company.

Compare Credit Repair Companies

Begin by comparing the different companies. As you do, check how much each company charges and how the fee structure works. While some charge monthly, others only make you pay a one-time fee. Then, others charge for every item that gets deleted from the credit report.

Read Reviews

Next, read the online reviews. Make sure that the company doesn’t have a bad reputation online. If you see lots of negative reviews, move on to the next company.

Review the Contract

Legitimate companies will send a contract before providing a service. Read the fine print to make sure that there aren’t any hidden fees or stipulations.

Avoid Companies That Make Guarantees

Some companies make false guarantees, such as they can improve your credit score by 50 points. False promises are a huge sign that the company is running a scam. If you see this, run the other way. You shouldn’t give that company your money.

Ready to inquire about credit repair services?

Contact Debt Defenders to discuss your credit repair needs. Call us at (888) 333-3851 today.