If you are one of the millions of Americans who have poor credit, you may find it challenging to qualify for a credit card, get an apartment, or even to take out a personal loan. While this is true, there is help out there in the form of credit repair companies. If you are interested to know about the services offered, keep reading to learn about credit repair companies, how they work, and when their services may be a good option.
In most cases, a credit repair company is going to offer to review your credit report and to address any negative item on your report with the credit bureau in an effort to have it removed.
You must also learn the process of filing a credit dispute.
What Are Credit Repair Companies?
Modern credit repair companies work to improve your credit. They do this for you for a set fee. Keep in mind, credit repair and credit counseling services are different. In most cases, credit counseling is going to be offered for free.
While a credit repair company may be a good idea, there are several companies that are considered scams, according to the Federal Trade Commission. If you want to avoid interacting with these scammers, be sure to carefully research the organization before you agree to pay any money to them.
Tips for Verifying a Legitimate Credit Repair Company
There are several methods you can use to figure out if credit repair company is legitimate and trustworthy. There are several tips to use, which include:
- Read various reviews and testimonials of the company on the BBB website
- Search the complaint database on the Consumer Financial Protection Bureau website
- Search any other review sites to see if you can find any helpful user reviews
Make sure that you avoid a company if what they are offering seems too good to be true. If a company says they can do any of the things mentioned here, it is a clear red flag and a sign of a scam:
- Guarantee your credit will improve
- Remove any accurate negative information from your credit reports
- The company requests that you pay them before offering any services
- They create a new, legal identity for you
In most cases, working with a credit counselor and then asking them to recommend a credit repair service is a good move. These services are likely going to know what companies to use and which ones to avoid.
How Long will Credit Repair Take?
In most cases, credit bureaus will have 30 days after they have received your dispute to investigate and to verify the information you have provided. Usually, the credit bureau is going to contact the organization that sent the information and make a request that they investigate the matter. It is required, by law, that the credit bureau sends you the investigation results within a period of five days after the process is complete.
However, if the credit bureau figures out that this is a “frivolous” dispute they can make the decision not to investigate at all, as long as they let you know this within a period of five days. Understanding these factors will help you figure out if credit repair is a smart option for you.
Is a Credit Repair Company the Right Option for You?
It’s important for each person to carefully consider if a credit repair company is the best option for their needs. Be sure to get in contact with several service providers to compare costs and find the option that best suits your needs. Doing this is going to pay off and help ensure you have a positive experience with the credit repair service provider that you ultimately hire and use.