Personal Finance
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5 mins read
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May 27, 2021
Credit Repair Companies: Do They Work?
Ever wondered how credit repair companies work? Or when they can help you clean up your credit score? Read on and get up to speed.
Have you ever wondered how to start a credit repair business? Or maybe how they work? At best, they seem like a major scam, or yet more financial experts looking to benefit from
(but not so much that you don’t need them anymore).
There are many things that may be damaging your credit score, like late payments or unpaid debts. Then there are some things that a credit company erroneously put there, and now you’re suffering because of it.
In these cases, you can seek out some well-known credit repair companies. They can help you remove all the things hurting your credit score that shouldn’t be there.
If you’ve been late on payments or generally not smart with your money, the most logical step would be to start paying your bills on time. Beware of many
that don’t do much but demand money upfront, and be very careful about who you share your financial information with. Make sure you fully understand
from the three major credit providers in America. These would be Equifax, Experian, and TransUnion. You can order your credit reports online, and review all the information they contain.
If any of the information you see in your report is incorrect, or transactions that you paid on time are shown to be late in the report, you have the right to dispute that with the FTC. You can find the process you have to go through to make that happen online.
The problem people have with disputing information in their credit report is that they’re not fully aware of the legal process, or feel that they will be more accurately represented by professionals who know more about the laws going into it than they do.
Disputing Incorrect Information
Once you work out what parts of your credit report need to be altered, you can move forward with the dispute process. Your credit repair company might be able to handle this for you, but it shouldn't take longer than a month, because credit providers are required by law to investigate your dispute in that time.
The report usually contains proof of your payments and anything else the authorities will need to verify your claims, and it’s the credit repair company’s job to make sure it’s all there.
The Final Verdict
Once a month is over, you will hear back from the credit repair company who will inform you of the final verdict, and if it went in your favor or not. More often than not, the dispute is resolved and all relevant parties are notified. Any erroneous records are cleared from your report. If not for this process, they would have stayed there for the next seven years.
Does the Credit Repair Process Work?
A credit repair company is only able to help you with
if there's something wrong with it in the first place. Some companies do provide a credit monitoring service, but in the end they cannot wave a magic wand and make your credit score look better than it should be.
If everything in your credit report looks accurate when you get it, there isn’t much that a credit repair company will be able to do, and a reputable one will tell that to you. However, there are many companies who will try to take advantage of you by claiming they can manage your money and alter your transactions for you in a way that improves your ultimate score. They’ll also demand payment for their services upfront. If that happens, don’t believe their claims.
So, in the end, credit repair companies can and do help you improve your credit score, but only when there is something to be fixed. If all of the information in your credit report is accurate, the credit repair company cannot make it look better than it is, or fabricate transactions to
.
Ashley Lipman
Ashley is an award-winning writer at StudyClerk who discovered her passion for providing knowledge to readers worldwide on topics closest to her heart — all things digital.
