When to Use a Credit Repair Service (and How to Find One)

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If your credit reports contain inaccurate or unverifiable negative information, it can seriously harm your credit score. This can make it difficult or impossible to get approved for a loan, credit card, rental property, or even a job. The good news is that if negative items on your credit reports are incorrect or unfounded, you have the right to dispute them and have them removed. However, this process can be time-consuming and complex. This is where credit repair services can help.

What Credit Repair Companies Do

Credit repair companies work on your behalf to dispute errors, outdated information, and unverifiable negative items with the credit bureaus and lenders or data providers reporting the information. The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate allegations of inaccurate or unverified information in a credit report. If the lender cannot verify the negative item, it must be removed.

Here are some examples of negative issues that can be addressed through credit repair efforts:

  • Late payments that are incorrect

  • Writing off and collecting debts that you didn’t actually have

  • Duplicate negative entries logged multiple times by mistake

  • Debts or negative items that are too old to report anymore (usually 6-7 years)

When should you use a credit repair service?

You may want to consider using the services of a credit repair company if there are legitimate negative items on your credit reports that are lowering your credit score. This may include:

  • Several late payments you have made are preventing your credit score from being restored.

  • High debt burdens and maxed out credit cards make it difficult to use credit.

  • Past offenses, write-offs, repossessions or other serious derogatory marks

While credit repair cannot truly erase accurate negative information, it can help remove incorrect information that should no longer be on your reports.

How to use the credit repair service

When you sign up for a credit repair service, they will receive copies of your credit reports from all three major bureaus. You will be required to provide documentation to support any disputes regarding information that you believe is inaccurate. A credit repair company will review your complete reports and recommend a plan for which items to challenge first for maximum benefit.

The recovery process then involves submitting formal disputes and documentation to dispute the negative reports. The credit bureaus must then investigate and review or remove the items accordingly within 30 to 45 days. This cycle of arguing continues until, hopefully, all inaccurate negatives are resolved.

As for costs, you can pay a one-time flat fee or pay for each derogatory mark the company removes from each of your reports. According to Credit Karma , this amount can start at $35 per removal and go up to $750 or more. The company may also charge a monthly fee ranging from $50 to $130 or more.

Because credit repair scams are so common , make sure you use a reputable service. Some better options to consider:

Again, be wary of any credit repair service that requires huge upfront payments —it could be a scam . Otherwise, professional credit repair help can quickly improve your credit score by correcting errors and removing invalid negative items that are weighing you down. And if you’re suffering from a low credit score, you can take additional steps to improve your credit .

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