7 things to keep in mind when looking for credible credit repair companies
If you want to make your credit repair process a happy and fulfilling experience, stay away from credit repair companies that promise instant results.
These repair companies are out to take advantage of vulnerable individuals by giving them fake promises. They claim that they can give you a particular credit score, fix your bad credit instantly, or even change your identity to erase the bad credit history.
Truth is, if you fall victim to such scams, you’ll lose your money but remain with bad credit. Repairing your credit takes time, so next time you want to rebuild your credit and hire credit repair services, avoid companies that are unethical.
What do credit repair companies can do that you can’t?
Like filing taxes, many people still outsource their credit repair. They feel the process is tedious, time-consuming, and are less confident in negotiating with creditors or that they may not achieve the best results.
While there is nothing complicated in repairing your credit, you need some knowledge of how credit works. It’s important to note that your bad credit cannot change overnight, and so to fix it, you’ll need patience and some hard work until you get the job done.
Some of the things that credit repair companies do that, you can also do and save yourself the expenses.
Download your credit reports and analyze them
Credit repair companies will get your credit reports from the three credit bureaus Equifax, Experian, and Transunion.
They’ll professionally examine each report to identify errors, derogatory remarks that are not 100% accurate, and mistakes.
If there are indeed errors worth disputing, they will make a dispute to the credit bureaus to have the negative items on your credit report removed.
They’ll also negotiate with your creditors to remove the negative information they made and settle for a repayment plan that’s comfortable for you and won’t hurt your ratings.
During the credit repair process, you’ll work with a representative from the repair company, and answer several questions regarding your credit. You have to provide documentation that the credit repair company will use to prove your claims.
Usually, the credit bureaus take 30 days to contact your creditors to verify the information before responding to your inquiry. If the claims are indeed correct, you will get a new report with the negative items removed, and receive an accurate rating.
This is something anyone can do, right? Doing self-credit repair gives you control of your credit and saves you the monthly fee of $79-$99 depending on the company you use.
What they cannot do
Avoid credit companies that come to you with promises that they’ll improve your credit score.
No credit company can raise your credit scores.
All they do is remove negative and inaccurate items on your reports.
You should note that if you were living in bad credit, removing negative items on your reports will not instantly improve your credit scores.
All it does is give you an accurate rating and improving your credit score will take a conscious effort of paying your bills in time every time, living within a reasonable credit limit, paying off your bills, and having a budget for your income so that you don’t spend more than you earn.
- Negotiate with creditors to cancel your debts
This is not possible and if someone tells you that, know that they are a scam.
Credit repair companies will negotiate with your creditors to come up with a debt repayment plan that’s comfortable and deteriorate your credit further.
Hiring credit repair services don’t absolve you from your debt obligations. You’ll still have to pay them in full.
- Change your identity and erase your bad credit history
This is both impossible and illegal.
Nobody should talk you into changing your identity, and if a repair company gives you such promises, that’s a red flag.
Instead of lying about your identity to get a new score, have a plan in place that’ll help you achieve good credit, and put in the extra effort to maintain it.
How to identify legitimate credit repair companies
With the so many credit repair companies to choose from, it pays to be a tad careful when making a hiring decision.
In a bid to protect vulnerable citizens, the credit repair organization act established rules and guidelines which all credit repair companies have to follow.
The act states that:
- No customer should pay an upfront payment. Clients should only pay for services rendered.
- The credit repair company should give a scope of their activities. No credit repair company should make claims and promises for something they cannot do.
- There should be a written contract between the client and the repair company. The law gives the customers a right to cancel the contract without pay within three days.
- Customers should not lie about their identity or change them in a bid to erase their bad credit history.
- The repair company should state in the contract how long it takes to fix your credit.
Below are some of the things to look out for when hiring a credit repair company:
Any reputable credit repair company will have past reports from clients who’ve used their services.
Take your time and go through the reviews on their website, and check out what clients say about them.
An ethical and reputable repair company should have at least ten positive reviews and several five stars.
According to the credit repair organization act, there should be a written contract between the credit repair company and the clients stipulating the scope of services provided, the terms of payment, and how long the process is likely to take.
The clause also provides the clients with rights to cancel the contract within three days without pay. A company that values its reputation will ensure that it offers its customers a contract before they engage further.
- Adherence to the rules and regulation in the act
Any company that does not adhere to the credit repair organization act is a scam and out to take advantage of vulnerable citizens.
Ensure that the company you want to hire is interested in helping you improve your credit score by removing negative items on your report, and not fleecing you of your hard earned money.
- Is the company a member of the ECRA
Ethical Credit Repair Agency is a regulatory body that ensures that their affiliate members act according to the regulations that govern the industry.
ECRA operates like Better Business Bureau and protects citizens from unscrupulous credit repair companies.
Opt to work with a repair company that’s an affiliate of at least one regulatory agency. That way, you’ll be confident of the services they offer.
- Avoid spam messages offering credit repair services
No matter how desperate you are to fix your credit, don’t fall for unsolicited credit repair offers you receive through the mail.
Chances are these repair companies are out to take advantage of your situation.
Reputable credit repair companies don’t send spam emails to attract clients.
- Beware of a company that asks you to change your identity
Changing your identity is both unethical and illegal. If you are caught, you’ll be in big trouble.
Don’t work with a company that uses such unorthodox means of repairing your credit.
- Their customer service should be top notch
You want to work with a repair company that respects you and treats you with some empathy.
If you have complaints or suggestions, their customer service should take them up and not brush your ideas off. They should also explain to you the options you have, and what to do when the negative reports appear again after the repair.
They should also let you know what action they’ll take if they cannot remove the negative items from your reports.
Benefits of using credit repair companies
The benefits of living in good credit are numerous.
You’ll not only be eligible for loans with better terms, but you can rent anywhere, get employment and generally have that sweet feeling of knowing you can access credit anytime you want.
If you want to repair your credit and feel less confident to do it alone, you can hire a credit repair company and save yourself the headache.
Below are some of the benefits of using credit repair companies:
- Free credit monitoring and consultation
Most reputable repair companies offer free consultation and follow-up services. You’ll have a credit representative go through your credit reports, discuss with you about your spending habits and probably identify the reasons for your bad credit.
This discovery will help you come up with measures that’ll quickly raise your credit scores.
- Faster disputes
Credit repair companies pride themselves for working fast and smart.
They usually work in cohort with creditors and can easily access documents that they’ll use in proving their claims.
You may not have all the documentation required as proof, making it a daunting and time-consuming task of having to go to each of your creditors.
Once they have access to these documents, disputing your case will be less of a hassle to them and they’ll do it within the shortest time possible.
- Gives you peace
You’ll be more at peace knowing that a professional is handling your case.
These professionals are good at what they do and have the expertise to deliver perfect results.
You don’t have to get confused when looking for credit repair companies. You can use the above information when looking for the best credit repair companies.