Finance & Insurance

Are Credit Repair Companies Worth the Cost?

The credit repair process entails removing any negative information from your credit reports, such as delayed payment. If your credit report has any such information that typically gets retained on your credit report for 7 to 10 years, chances of getting a credit card or a loan suffer greatly. This is why credit repair is advised, and you can either do this by yourself or hire a credit repair company. 

But with the bad reputation you have gotten the last few years, you might be wondering whether to find credit repair help on or repair the credit by yourself. Here’s an in-depth guide to examine whether to repair your credit by yourself or hire a credit repair company. Let’s get started. 

What’s a Credit Repair Company, and How Much Do They Charge?

A credit repair company is a profit-making firm that offers you credit repair services to boost your credit score in exchange for a fee. How much you’ll be expected to pay varies from one company to another, but the cost typically ranges between $50 to $150 per month. But before paying this subscription fee, you’ll first be expected to pay a startup fee which can be as high as the monthly fee. 

Other companies provide you with a pay-per-delete model where you’re charged for every error on your credit report that’s removed. The credit repair process usually takes months to one year, and the errors that the company shifts their focus to address include;

  • Misspellings cause negative entries due to a name mix-up with a person with a similar name to yours.
  • Debts that aren’t verified and validated.
  • Accounts that don’t belong to you.
  • Bankruptcy and other legal actions which aren’t yours

The big question you must ask yourself is whether hiring a credit repair company is worth it? Well, there’s no right or wrong answer to this question because the complexity of this process is what determines what you should do. If the issues to be resolved are only a few, you can personally deal with the credit repair. However, there are certain incidences when it’s best to approach a credit repair company, and this include; 

Dealing with Complex Issues

If your credit report has a lot of complicated issues that need to be resolved, hiring a credit repair company is advised. An example of such an issue includes duplicate data on your credit report. A credit repair company boasts the needed experience and skills to improve credit score. In addition, they’re knowledgeable on the federal laws, including; 

  • The Fair Credit Billing Act (FCBA)
  • The Fair Debt Collections Practices Act (FDCPA)
  • The Fair Credit Reporting Act (FCRA)

With all this law knowledge, they know how to ensure your credit report reflects your deserved credit score. If you opt to repair your credit, all this is the knowledge you need to learn, and this takes up a lot of time. 

Save Time

The credit repair process is a long and tiresome process that entails a lot of back-and-forth communication among different parties such as credit bureaus, creditors, and collections agencies. This process also requires specialized knowledge to carry out competently. If you don’t have time to learn the details about laws and policies relating to consumer law, credit reporting, and credit score, you’re better off hiring a credit repair company. 

Save Money

While hiring a credit repair service might look expensive, it saves you a lot of money in the long run. Without their help, you’ll end up spending more time trying to increase your credit score, and in the process, continue paying high-interest rates on your loans and mortgage. This wouldn’t be the case with help from a credit repair company, as you’d qualify for a loan or mortgage at much lower interest rates. In addition, you won’t have to hire an attorney who’s expensive to guide you during the credit repair process.    

Get Ongoing Support and Advice

The credit repair process isn’t straightforward because it involves a lot of negotiations among the involved parties to come to a decision. All this can become quite overwhelming if you’re inexperienced in this matter. Because of this, you should consider hiring a credit repair company and get helpful advice, including;

  • Answers to any credit question you might have
  • Practical advice on debt relief
  • Initial consultations and evaluations
  • Constant updates on the progress of your credit repair process

When working with a credit repair company, you’re guaranteed greater support when negotiating for a deal with a creditor. Therefore, you stand a better chance of getting an excellent repayment plan and know all options available on ways you can boost your credit. 

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