credit fixing services promise to remove errors from your credit reports and improve your credit score by working with the credit bureaus, creditors and debt collection agencies. They also claim to help you get your loans approved, reduce your interest rates and set up repayment plans to pay off your debts. While these companies can provide valuable assistance, they are not a panacea. Many people can fix their own credit by obtaining and reviewing their credit reports, disputing errors and adopting responsible financial habits. Others can find free or low-cost credit counseling from non-profit organizations to receive guidance and develop a plan to deal with outstanding debts.
Unfortunately, there are plenty of scams out there that claim to help people “fix” their credit. These firms exploit loopholes in the Fair Credit Reporting Act to make it seem as if they are doing something helpful, when in reality they are using misleading tactics and putting consumers at risk of harming their credit scores even more or digging themselves into a deeper hole financially.
The best credit repair companies focus on disputing inaccurate information on your report, contacting the credit bureaus and requesting that they investigate and remove items that are incorrect or unverifiable. They also communicate with creditors and debt collectors on your behalf and send letters asking them to correct erroneous or outdated information. While you can certainly do all of these things yourself, credit repair services make the process faster and more convenient.
A good credit repair company will never ask for payment upfront, as this is against the Credit Repair Organizations Act. The best companies will accept monthly payments, and most offer a money-back guarantee. Some, such as The Credit People, allow you to cancel or pause your service without paying the monthly fee, and they refund your last month’s fees.
When you are shopping for a credit repair agency, look for one that offers a variety of packages with different options for how many items the company will dispute per month and whether they include additional benefits such as budgeting tools or personal finance calculators. It is important to consider your budget and needs before choosing a credit repair company, and you should also look for consumer reviews and whether the company has any lawsuits filed against it.
While some credit repair companies do help people get accurate information removed from their reports, it is a complicated process and should be done only under the supervision of a lawyer or by following the steps outlined in the Fair Credit Reporting Act. If you choose to go this route, it is wise to seek legal representation from a trusted firm such as Lexington Law Firm, which has helped more than 450,000 clients have over 77 million items removed from their reports since 2004.
There are several other legitimate credit repair companies, such as Sky Blue, which is a member of the Better Business Bureau with an A+ rating and consumer comments that are overwhelmingly positive. It charges a lower startup fee than other companies and allows you to skip a month of service with no penalty, and it will resume your subscription when you are ready.