Credit fixing services offer to improve your credit score by disputing errors with the three main credit bureaus (Experian, Equifax and TransUnion) and negotiating with creditors to remove negative items like late payments or collections. Many of these companies also provide education and advice on how to manage finances, create a budget and build healthy spending habits.
However, it’s important to note that these companies aren’t actually capable of removing all inaccurate information from your report. The Fair Credit Reporting Act allows you to dispute inaccurate information yourself, free of charge. And, even if the company you choose does successfully dispute an error on your report, it will only be removed temporarily until it shows up again in the future.
To avoid getting taken advantage of by a credit repair company, check out online reviews from other consumers and look at the company’s up-front fees as well as its monthly fees for services. Some credit repair agencies charge a one-time setup fee, while others charge a monthly subscription that includes a set number of bureau and creditor disputes as well as financial tools like credit score trackers and budgeting software.
Another way to find a trustworthy credit repair service is to see which ones are members of the Better Business Bureau or that have received a high BBB rating or Yelp stars. You can also read consumer reviews and look for lawsuits filed against the company to gauge its reputation.
When evaluating a credit repair service, make sure the company is in compliance with the Credit Repair Organizations Act. This law requires that credit repair companies give you a written contract explaining the services they will provide, how long it will take them to get results and their total costs before they start working on your account. It’s also required that the company tell you you have three days to cancel your contract if it doesn’t meet your needs.
Finally, consider whether the credit repair service you are considering has a money-back guarantee. Some credit repair services, such as Lexington Law Firm, offer a 90-day refund policy while others, such as Sky Blue Credit Repair, let you pause your membership and then resume it whenever you’re ready to start working on your credit again.
While hiring a credit repair service can help you reach your financial goals faster, it’s also worth noting that these firms often don’t deliver on their promises. In fact, some of these credit repair services will even damage your credit by disputing accurate information that should be on your report in the first place. This is a practice that violates the Fair Credit Reporting Act, and it’s illegal.