Your credit score can help determine everything from where you live to what you drive to what types of jobs you’re eligible for. So if your score isn’t where you’d like it to be, repairing it should be a top priority. But how do you go about that?
Many people seek help from credit repair companies, which promise improved credit scores. Credit repair services provided by the best in class companies have expended greatly in recent years, so it’s worthwhile to examine who they are and what they do.
What Is Credit Repair?
Credit repair organizations don’t often reveal their methods publicly, but industry experts believe they send dispute letters to the credit reporting agencies in an effort to have negative information removed as detailed in the Fair Credit Reporting Act. These types of disputes account for about 30 percent of all disputes involving credit reporting agencies.
While it’s certainly possible to file a dispute with a credit reporting agency yourself, many people prefer to hire credit repair agencies to do the work for them. Filing an initial dispute is a straightforward process, but if the dispute isn’t resolved to your satisfaction, things can get tricky. If you file the same dispute a second time, the credit reporting agency can consider it frivolous and decide to take no further action.
CROA and Credit Repair Services
Credit repair companies are heavily regulated under the Credit Repair Organization Act. They are not permitted to charge you until services have been rendered. Additionally, they can’t promise that negative credit information will be removed. They also can’t advise you to dispute all the negative items on your report. And they must notify you that you can file your own dispute with your credit reporting agency for free. As you can see, credit repair companies are highly regulated and the best companies adhere to these policies in a very strict manner.
Are Repair Services Worth the Price?
Credit repair agencies do charge reasonable fees, primarily because the process of filing a dispute can be extremely involved. There are two common ways a credit repair service will charge you. The first method is a subscription model in which you’re charged a monthly fee. The second method is the pay-per-deletion model, in which a customer is charged only after negative information has been removed from his or her credit report. Either way, the amount of money you can save in the long run can eclipse the relatively small price of credit repair services.
When you hire a credit repair service, you’re hiring experts who can dispute (and re-dispute) an item in a way that the credit reporting agencies will take note of. Credit repair companies can’t legally do anything you can’t do yourself, but dealing with the credit reporting agencies can be very complicated and time-consuming. If your credit report includes a mistake that’s hurting your credit score and your efforts aren’t getting any results, it can be worth the expense of hiring a credit repair agency to fight on your behalf. You should now understand the answer to the question, is credit repair right for me.