Credit repair services help people improve their credit score and financial situation by disputing errors on credit reports. They also help consumers understand how to manage debt and make smart financial decisions. Although there are legitimate companies offering credit repair services, the industry is known for scams, so it’s important to choose wisely.
A low credit score can make it difficult to get loans and may even prevent you from getting a job. It can be tempting to sign up for a credit repair service that promises to fix your score in as little as 30 days, but these services aren’t always reputable and can end up costing you more money.
Before you sign up for a credit repair service, look for one with good consumer reviews, a solid reputation, and reasonable upfront and monthly fees. The Better Business Bureau (BBB) and Yelp are two good resources to use to find out more about a company’s customer satisfaction ratings. Also, look at how long the company has been in business and how many clients it claims to have helped.
The best credit repair services will work diligently to identify and correct errors on your report, including blemishes such as late payments and collection accounts. They can also help you create a budget and negotiate with creditors to reduce interest rates or waive fees. Many credit repair services will also offer advice on how to pay down your debt and help you develop a plan that can restore your credit score over time.
A credit repair service should not charge you a fee until it has fulfilled the services it has promised in your contract. They must also give you a firm total on costs and an estimated time frame for results, according to the Credit Repair Organizations Act (CROA). You also have three days to cancel services without penalty.
In addition to ensuring that they follow CROA regulations, a reputable credit repair service will also educate you on how to do the work yourself for free. This will help you avoid the risk of falling victim to credit repair scams. It will also save you the cost of paying for services that you can do yourself, such as submitting your own dispute to the credit bureaus.
It’s also a good idea to obtain your own free annual credit reports and check them regularly for errors. By checking your own credit reports, you can identify any inaccurate information that needs to be disputed and keep track of the progress you’re making toward a higher score. You can also take advantage of free credit counseling from any number of non-profit organizations if you need additional guidance.