Sunday, 21 June 2020

Do Credit Repair Companies Really Work?

Do Credit Repair Companies

It does not matter where we begin it matters what we finish and in the case of our credit score what we need to know is if we are working to boost our credit score is a credit repair company going to be helpful or would it be best to get some credit counseling to improve our credit score going forward. Let's take a closer look to find out if credit repair companies really work. Let's have an honest conversation about your credit score and what steps you can take that are going to work to boost your credit score and how to know if a credit repair company is going to be best for you.

What is a Credit Repair Company

A credit repair company usually promises that they do all the heavy lifting for you, they will go to bat for you with the credit reporting bureaus, credit reporting agencies, and they keep saying they are going to make things happen don't worry let us do the heavy lifting. it is important to note that with credit repair companies they do have a fee. Now, with credit counseling, it is completely different than credit repair companies. Credit counseling is often free, it is something that you can go through many nonprofit companies throughout the United States or simply Google, "credit counseling". Credit counseling actually teaches you how to set yourself up for future success and won't cost you a penny while teaching you how to boost your credit score in the most practical way.

The reason I bring that up is that the Federal Trade Commission also known as the FTC says that the credit repair company industry is fraught with scams. I don't want to see you become a victim of a scam, all you wanted to do was increase your credit score.

How To Verify If A Credit Repair Company Is Legit

We want to go to Google, we want to check out those online ratings, we want to check out those online reviews and see what other real people like you were saying. Not those paid advertisement and paid testimonial try to give you some props when in fact it may not have been the truth. Review it with an open mind and find the objective points, because you are going to find some things that are really good, you are going to find some things that are not so good. at the end of the day we want to stack them, and going back to Google why not just enter in

  • Top credit repair companies for the "year" that you are looking at.
  • Top credit repair companies in the "area" that you live
  • credit counseling "your area"

Start comparing apples to apples here and see which one is going to be the best fit. If you know credit repair specialists or if you have any family or friends that have used them successfully, why not talk to them and see what their experiences were working with them and who they chose to work with. 

While you are reviewing credit repair companies to see which ones may be right for you, there are four red flags to watch for.

Four Credit Repair Company Red Flags To Watch For

We Can Remove Negative Information That Is Accurate 

Any credit repair company that promises you that they can remove negative information from your account, that is a huge red flag and a definite no-go.

We Can Make Credit Identity For You 

Any entity that says that they can create a new credit identity for you. Your credit is your credit, not a credit identity, your identity is your credit whether it is good bad or indifferent, no one can legally set you up with a new credit identity.

You Need To Pay Before We Do Anything 

A company that requests you to pay before it provides its services. That would almost seem like common sense, why are you going to pay for something upfront until you get the goods that you have agreeing to. There are different compensation and different ways that these companies receive remuneration for their services, but any of them that says, hey, pays upfront and then we will get to it, that's a red flag right there we both know that's a scam.

We Guarantee That Your Credit Score Will Increase

Anyone that's guaranteeing you that they can get your credit score increased. It is hard to guarantee any boost in your credit score because everyone's situation is different and results will vary person the person.

How Do Credit Repair Companies Work?

Most of these credit repair companies are going to do the same thing that you and I need to do, getting an actual report from Experian, Equifax, and TransUnion. When they get your credit report from the credit bureaus then they are going to look at your file for primarily three things 

  1. Charge Offs
  2. Tax Liens
  3. Bankrupt

If you already know that you have these going on right now then they are telling you what you already know right here. The difference is they are going to send a plan into motion about how to dispute it and how they are intended to get those items removed or at least ways satisfied so that you can move on with a better credit score. Generally, their plans are going to include

  • Reaching out to the source of the derogatory or remark to validate the information to make sure it is accurate.

  • Look for letters to dispute erroneous negative marks, if in fact, those are found

  • Serve to cease and desist letters to debt collectors on your behalf.

  • The thing that they might do, but not all of them do, is actually "Suggesting you open up new lines of credit". 

How Much Does It Cost To Work With Them

When we are looking at their cost it depends because some of them are going to charge you a monthly fee somewhere between maybe $75 to $150 a month. They may or may not be worth it. It is up to you and how much your time is worth and whether you want somebody assisting you depending on how quickly you can learn this and apply it yourself. But there are those credit repair companies that will offer different services available to you on a monthly cost, then there are different types of credit repair companies that will look for getting you deletion letters and they could charge you as little as $75, but up to like $750 for each deletion letter it's able to obtain for you.

If you believe that a credit repair company is best for you, make sure that you understand the cost associated with their services and how it gets paid out, keeping in mind that they cannot charge you for a service before they delivered the results to you.

How Long Does It Take To See Any Results

It is important to note that generally, the credit bureaus are going to review you within 30 days of the time that something is filed. Let's say that they are going after deletion letter on your behalf, their credit bureau is going to have 30 days to review it. Within 5 days they are going to be sending you a letter as to the results of the investigation whether they agree with it and provided a deletion for the derogatory remark or whether they believed it to be completely frivolous. Either way within 5 days of the conclusion from the credit bureaus you are going to know the results whether it was good, bad, or indifferent.

To help you get started. If you are thinking right now that hey, you know what, maybe a credit repair company is not the right thing for me, maybe I can learn this myself, go back to the idea of getting credit counseling because it is free and there's a lot of helpful tools out there. There are also three other things that you can do right now today to begin escalating your credit score.
  1. Review Your Credit Reports For Any Errors
  2. Site Like Credit Karma Can Be Useful
  3. Take The Long Term Credit Repair Steps 

Getting a higher credit score is not an overnight process, getting a higher credit score generally takes a little bit of time because you need to establish a pattern of on-time consistent payments over a period of time. When that period of time happens the more consistent on-time payments that you have to your creditors, the higher your credit score will become as a result. If you are looking for an overnight fix, just know it really does not exist. let's make sure that we get this right for you by being honest right now with each other and with yourself so that you can take steps to get a better credit score.

Red Flags In Credit Repair 

It's important for you to exercise extreme caution before you proceed with a credit repair company. In fact, in 2016 alone the CFPB which is a (Consumer Financial Protection Bureau) said that half of the complaints they had against credit repair companies involve people believing that they were like - whether it was a fraud or whether it was a scam. We do not want to see that happen to you if you follow the suggestions in our article today. It is also important to know that there are additional protections underneath what's called 

  • The credit repair organization ACT (CROA) makes illegal for credit repair companies to lie about what they can do for you 

If for some reason you believe that you have been the victim of a credit repair company please go to the CFPB, (Consumer Financial Protection Bureau) and file a complaint.


What I am going to ask you to do is before you start entertaining credit repair companies and believing the song-and-dance that some of them will hype up promising you the Sun, the Moon, the stars, in the world. what I am going to ask you to do is get real with yourself. and why not take a look at getting credit counseling it's a free resource.

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