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Important Things to Know Before Choosing a Credit Repair Company

Poor credit can diminish your opportunities in life, including home and car purchases, loan requests, credit card applications, and even new employment. Credit Repair companies are designed to improve your credit scores in a timely manner by removing negative items and questionable information from credit reports. This removal process is typically known for allowing those with bad credit scores to have a second chance.

Although credit repair can be done without the assistance of a credit repair company, the results may vary. Be cautious of companies that promise unrealistic credit repair results. Keep in mind that the best credit repair companies have organized methods and strategies that are clearly explained to potential customers.

Industry disclosure

Companies in the credit repair industry are often negatively viewed by the public due to a lack of disclosed information and past credit repair scams. Some states have laws that now prohibit or regulate the operation of credit repair companies, and some credit repair companies have ruined reputations due to illegal activity.

If you have bad credit and are looking into credit repair companies, you should be prepared to request additional information regarding services, contracts, pricing, fair credit reporting act compliance, and refund policies. The best credit repair companies have higher customer satisfaction ratings and are usually trusted to provide more upfront disclosure as well as higher quality credit service.

Doing your own credit repair industry research on each top repair business can prove beneficial before meeting with any company-specific representatives. With research, you have the opportunity to catch any irregular or dishonest proceedings from credit repair companies before you waste your time and money. Understanding how the credit repair process operates and how it affects your credit score is important.

If you are suspicious of a company's repair services or actions, then you should not use its services or cancel services if you are already using them. Although there are many legitimate companies within the credit repair industry, it's important that you recognize the right red flags in order to avoid falling for those credit repair organizations that operate under illegal or illegitimate conditions.  

Credit repair services

Credit repair companies provide services that can also be undertaken by individuals; however, many people choose to use credit repair companies over do-it-yourself credit repair because of the amount of time and energy that is needed to properly learn credit repair processes and file the correct legal paperwork. Credit repair can take time and significant dedication, which leads many individuals to credit repair company services.

Most credit repair services include a credit report/credit history consultation, working with credit bureaus to fix credit report-related mistakes, searching for ways to get past legal restrictions to help raise a credit score, writing and sending good faith letters to lenders, credit monitoring, and even providing additional services such as identity theft protection, fraud notifications, tools to improve financial awareness, etc.

Many credit repair companies also offer free credit consultations, work with more than one of the major three credit reporting agencies to dispute negative items from credit reports, allow 24/7 access to an online portal to monitor your progress, easy access to customer service/credit repair expert help, and educational credit resources. Comparing services among multiple credit repair organizations in the industry will help you determine which repair services can meet your credit needs.

Prices and payment

Prices among credit repair companies vary per person, company, and credit situation. Most credit restoration and credit repair prices are determined by the services required, how much work needs to be done to improve your credit, which credit repair business you choose to use, and what company policies are in place. For example, some companies have an upfront fee while others offer a free trial. Reliable credit repair companies will be most likely to give customers a quote, a free trial period/ free credit report consultation, and a clear explanation of repair services and refund policies.

Many companies require either monthly payments or a pay-per-deletion fee, which means you will only pay for the items deleted on your credit reports. Some additional payments may be required, but researching what those fees are beforehand or if there are fees that will be applied can save you from unfortunate circumstances.

It's important to also predict how much you are willing to pay for credit repair services. If you have a very poor credit score, then you might have to invest more money in credit repair services in order to get your credit where it needs to be. Fortunately, many credit repair companies offer a variety of services and credit repair plans with wide price ranges to choose from. Some credit repair companies even provide options for specialty credit repair services depending on your situation. The company you are considering should disclose all additional fees along with credit service/plan prices.

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Credit repair processes

Because credit can significantly affect life's opportunities, making sure you have good credit is incredibly important. Surprisingly enough, many people suffer from poor credit score situations which is why credit repair companies were developed. Good credit can provide you with lower interest rates, the ability to get a car or home loan, easier credit card approval, lower insurance rates, better rewards, and much more.

FICO Credit Score Ranges

(Official FICO credit scoring ranges from poor credit to excellent credit)

To improve your credit score, you can either develop good long-term credit habits and see a slow increase, take the time to repair your credit on your own, or hire a reputable credit repair company to do the work for you. In order to find a reputable credit repair company, it is recommended that you consult several online credit repair reviews.

With the right company, the credit repair process will seem fairly straightforward. Most reputable credit repair companies will offer a free consultation before they start repairing your credit. This consultation typically involves a company expert or credit professional looking at copies of your credit reports, seeing your current credit score, and determining how much credit repair your situation requires.

Once you enlist a credit repair firm's services, the company will start working with creditors and major credit bureaus. The company will send the reporting agencies dispute letters to remove negative items on your credit reports in order to begin your credit restoration process.

Due to online portals (offered by most credit repair companies), you will be able to see your credit progress and eventually get your results. If you do not receive positive results, many companies have some form of money-back guarantee or refund. Regardless of what credit repair company you choose, knowing what affects your credit score (like debt and late payments) will help your credit.

How long will it take to fix my credit?

The time required to fix your credit depends on the company you choose and how low your credit score is initially. Most credit repair companies will provide you access to your credit progress throughout the process. No credit repair business can promise you a specific time frame in which your credit will be fixed. It can take anywhere from days to months depending on your credit situation and how well the company works with credit bureaus to dispute negative items. The best thing to do is to consult with your credit repair company and keep an eye on your credit throughout the process.

Do I need credit repair?

First, you should determine how bad your current credit score is, what you are hoping to get out of good credit, and how much you would be willing to pay to get your credit back on track. Because good credit plays an important role in your day-to-day life, paying for professional credit repair services is, more often than not, worth it. Many credit repair companies will offer a free consultation that can help you decide if their credit repair services are a good match for you. Doing your own research on several credit repair companies can give you a good idea of industry prices, services, and possible results.

Can I repair my credit on my own?

You can, in fact, repair your own credit. However, repairing credit on your own can take up a significant amount of time, energy, and even money. Credit repair companies are often highly experienced in repairing credit and can offer the best results possible regarding the time and money to dispute items. Credit repair companies also have more reliable and successful credit repair strategies than those who try to repair their own credit.

Companies spend a considerable amount of time making sure items are disputed and removed from credit reports. Those who repair their credit without the help of a company do not have access to the same resources that companies do. For example, many credit repair firms have attorneys on staff, lawyer connections, legal assistants, and credit experts to help them obtain the best results possible.

How do credit repair companies work?

Although credit repair services vary, most credit repair companies take the same path to repair your credit. Credit repair companies will often set up a credit consultation to go over your credit reports and credit score to figure out what items need to be disputed. Once you enroll in services, credit repair companies start working with the major credit bureaus and creditors to dispute negative or questionable items on your reports.

Regarding disputes, the credit repair company you choose will work on your behalf to get items removed from your credit reports. Since credit bureaus are not restricted by law to review dispute claims, many individuals have a hard time getting items removed from their credit reports. Credit repair companies encounter this challenge as well, but most companies in the industry are determined enough to continue sending dispute claims and have reliable strategies to get their claims reviewed by credit reporting agencies. Most credit repair companies have legal teams and experts to ensure that you are represented fairly and that your credit reports get cleaned up.

What hurts my credit score the most?

Several things can hurt your credit score. Making late payments and not paying your bills can have a huge negative impact on your credit score. In regards to FICO scoring, late payments make up 35 percent of your entire credit score. Your credit utilization rate can also hurt your score. High credit card balances will raise your credit utilization which can negatively affect your overall score.

Closing credit cards is yet another bad credit move as credit history length accounts for 15 percent of your credit score. Closing old credit cards will shorten the overall length of your credit history. On the other hand, opening or even applying for too many credit cards at once will also negatively impact your credit score.

Lastly, maxing out your credit card will hurt your score by making you look irresponsible to lenders and creditors. Although there are many other factors that can hurt your credit score, the habits listed above cause some of the most damage to your credit score.

What helps my credit score the most?

Building good credit starts with practicing good credit habits. For instance, paying your bills on time can really help you build up your credit over time. Another good habit to form is checking your credit report on a regular basis. Obtaining a free copy of your credit report once a year can help you catch negative or fraudulent activity before it gets out of hand.

Having a good credit mix accounts for 10 percent of your overall credit score. A credit mix means that you use different types of credit like loans, mortgages, and credit cards instead of using just a credit card. When you do use a credit card, however, make sure you are using it wisely to build credit. For example, you should use your credit card to pay recurring payments like rent, utilities, gas, etc. Making these types of payments with a credit card will ensure you don't max out your card or have too high of a credit utilization rate.

What are the biggest credit repair myths?

The credit repair industry has inspired quite a few myths. One popular myth is that credit repair is illegal. Although some credit repair companies have been known to operate illegally in certain states, most credit repair companies are, in fact, legitimate businesses. In fact, some of the top credit repair companies have been in business for over 25 years.

Another myth that continues to be spread is that you can get the same results from repairing your own credit as you can with a credit repair company. This is not the case because most individuals lack the extensive credit repair knowledge and expertise that credit repair company employees and legal teams have. Although you can repair your own credit, credit repair companies tend to get faster, positive results as it takes time and energy to dispute items and file paperwork.

One myth that also continues to spread is that credit repair companies can guarantee positive, fast results. Due to the variety of credit situations and circumstances, companies simply cannot guarantee anything. Credit repair companies that do promise fast results are most likely operating a scam-based business.

What is the best credit repair company for me?

Many companies in the credit repair industry offer quality credit repair services as well as competitive prices. Although some companies are clearly better than others, you may have a hard time determining which company is the best for you. Taking advantage of online resources and taking the time to do your own research can help you identify which companies are trustworthy, which companies have the best prices, and how services vary per company.

You will notice that top credit repair companies usually have more positive reviews than other companies in the industry. Reading reviews is also a great way to determine what credit repair company will be the best for your credit situation. Keep in mind that your credit situation and price range can also affect what credit repair company you choose as some companies offer more rigorous credit repair service options than others.

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