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Inaccurate or unverifiable negative information on your credit reports can severely impact your credit score. This can make it challenging to secure approval for loans, credit cards, rental properties, or even job opportunities. The good news is, if the negative items on your report are incorrect or lack sufficient proof, you have the right to challenge them and have them removed. However, this process can be time-consuming and complex. This is where credit repair services come in to assist.
What Credit Repair Services Do
Credit repair services represent you in disputing errors, outdated details, and unverifiable negative information with both credit bureaus and the creditors or data furnishers that report this information. The Fair Credit Reporting Act (FCRA) mandates that credit bureaus investigate claims of inaccurate or unverified information on a credit report. If a creditor cannot validate the negative item, it must be removed.
Examples of negative items that may be eligible for removal through credit repair include:
Incorrect late payments
Charge-offs and collections for debts you don't actually owe
Repeated negative entries reported multiple times in error
Debts or negative marks that are too old to remain on your report (usually after 6-7 years)
When to consider using a credit repair service
You might want to think about using a credit repair company if you have valid negative marks on your credit reports that are lowering your credit scores. This could include:
Multiple late payments that you did make, hindering your credit score recovery
Excessive debt and maxed-out credit cards damaging your credit utilization
Past delinquencies, charge-offs, repossessions, or other significant derogatory marks
Although credit repair can't truly erase accurate negative entries, it can help remove erroneous information that should no longer appear on your credit reports.
How to use a credit repair service
When you sign up for a credit repair service, they will collect your credit reports from all three major bureaus. You’ll need to supply documentation to substantiate any disputes over information you believe is inaccurate. The credit repair company will evaluate your entire report and provide recommendations on which items to dispute first to achieve the greatest impact.
From there, the process involves submitting formal disputes and relevant documentation to challenge the negative items. Credit bureaus must investigate and either verify or remove the disputed items within 30 to 45 days. This cycle continues until all inaccurate information is hopefully resolved.
In terms of fees, you may either pay a one-time flat rate or pay per derogatory mark that the company removes from your reports. According to Credit Karma, the cost can start around $35 per deletion, potentially reaching $750 or more. Some companies may also charge on a monthly basis, with fees ranging from $50 to $130 or higher.
Given that credit repair scams are unfortunately quite common, it's crucial to choose a trusted service. Here are some top options to consider:
Credit Saint – $79.99 per month
The Credit People – $99.99 per month
Lexington Law – $99.99 per month
Once again, be cautious of any credit repair service that requests large upfront payments—this could indicate a scam. On the other hand, professional credit repair support might help you quickly improve your credit by fixing errors and removing incorrect negative items that are holding you back. If your credit score is low, you can also take further steps to improve your credit.
