Using a credit repair company may be helpful if you are unable to resolve your own issues. However, if you only have a few small errors on your credit report, you may be able to handle those issues yourself and avoid the cost of a credit repair company. While both of these options can provide some form of relief, they differ significantly in their approaches and their long-term impacts on your credit and finances. While credit repair aims to improve your financial habits and creditworthiness, bankruptcy —though much more onerous—offers much more of a fresh start by wiping out debts.
Some accounts will comply with accuracy requirements and remain on your credit report until they fall off in seven years. The Federal Trade Commission (FTC) is a government agency that works to protect Americans from unfair business practices, including scams and fraud. If you have problems with a predatory credit repair company, you can file a report with the FTC. These laws prohibit many deceptive practices by credit repair organizations. Checking your own credit score is a soft hit on your credit and will not impact your score.
Can I Get Negative Information Removed From My Credit Report If It’s True?
It’s crucial to understand what legitimate credit repair companies can and cannot do, and to carefully vet any company before engaging their services. Making on-time payments is the single most influential factor in determining your credit score. Each on-time payment, whether for credit cards, loans, or other debts, contributes positively to your payment history.
Debt consolidation generally refers to a personal loan that’s used to pay off credit card debt, repaid in monthly installments. These loans won’t have an interest-free period, but you can generally qualify for lower interest rates than with a credit card. That can make debt consolidation loans a better option if you’re paying off a moderate or large amount of debt. With bad credit, finding a credit card consolidation loan can be more challenging, but there are options. Start by looking for lenders with low minimum credit score requirements; some lenders offer debt consolidation loans for bad credit and have credit score requirements below 600. Provided through Upgrade, Universal Credit is an online lending platform that offers personal loans between $1,000 to $50,000 through its partners.
To calculate your credit utilization rate, divide your total credit card balances by your total credit limits and multiply by 100 to get a percent. Do this for each card you hold and for the total of all your credit cards. It’s always a good idea to check your credit score regularly so you understand how your habits impact your score. You can also receive a free credit report weekly through AnnualCreditReport.com.This is a handy way to catch any new errors or negative information. Credit Saint’s unique integration with Experian and TransUnion offers seamless credit report access and error correction. It uses customized attorney-drafted letters instead of generic templates, which is ideal for prioritizing efficient dispute-handling.
Applying for too many credit cards in a short period, carrying high balances on your accounts, or even becoming a victim of identity theft can drag your score down. These issues can make it harder for you to secure loans, rent an apartment, or even get decent insurance rates. Although there are legitimate credit report companies, the industry has a history of fraudulent business practices. For example, the Federal Trade Commission lodged a complaint in 2022 against a Texas-based credit repair company that allegedly charged consumers illegal $1,500 advance fees for services. EZ Credit USA provides credit counseling services to individuals from Houston and the neighboring areas.
This popular outfit began in 2011 as a software-based “self-help” credit repair company. Through word of mouth and “more than 99,000 cups of coffee a year,” as stated on their website, Pyramid Credit Repair became the respected, service-oriented organization of today. If you’re a user with poor credit, you’re likely to see an average increase of 12 points after using Experian Boost. You can also request that negative payments are not taken into account, cherry-picking the best parts of your financial history to paint yourself in the best light. All Rights Reserved.Make the most of your credit reports and scores. Before hiring a credit repair company, it’s important to weigh the potential drawbacks — including cost, limitations and risk of scams.
What Won’t Help You Rebuild Your Credit?
The company offers attorney-based credit restoration and credit building programs. Its team assists clients in removing negative information from their reports like liens, charge-offs, judgments, collections, repossessions, and foreclosures. In addition, the business has a credit education program that helps individuals restore their credit and achieve financial freedom.
What to know about credit repair companies Credit repair companies can review your credit report for inaccuracies and dispute them with the reporting agencies. Credit scores are like the gatekeepers to many financial opportunities in life, from buying a car to getting approved for a mortgage. However, many people don’t fully understand what goes into a good credit score – or how easy it can be to damage one.
Here they bring the big guns out with added bureau challenges, credit interventions, and cease and desist interventions. Since 2012, CreditRepair.com has performed more than 1.8 million removals and 19 million challenges and disputes. When you’re ready, you’ll select one of three credit repair packages best suited for your needs. As such, it’s a good idea to avoid applying for a credit card or loan without a valid reason.
You can typically see the score for free if you have an account with a bank, credit card company or other lender. You can also get your score by meeting with a nonprofit credit counselor. From understanding the credit utilization ratio to leveraging a personal loan for debt consolidation, you learn to take charge of your financial health.
Anytime you come across a credit repair service that seems like a scam, avoid it and choose a more reputable company. If creditrepair think you’ve been scammed, you can take steps to protect yourself and others, such as canceling the contract or filing complaints. The average credit score in the U.S. was 715 in 2024, according to Experian data. That’s unchanged from the previous year, and up slightly from 714 in 2022.
We downgraded companies that failed to support these regulations in our analysis. It can be worth paying for credit repair companies if you have significant inaccuracies on your credit report and need professional help to resolve them. All plans include TransUnion credit monitoring and some degree of identity theft protection, though both services are available free or cheaply elsewhere. The Credit Pros’ lowest-level Money Management plan doesn’t include credit repair. For that, you need either the Prosperity plan, which requires a $119 monthly fee and $119 first work fee, or the Success Plus, which requires a $149 monthly fee and $149 first work fee. Unless you’re also planning to apply for a credit builder loan, the Prosperity plan should suffice.
The plan includes everything from the Direct, plus the addition of a FICO Score Inquiry service to dispute inaccurate or unverified inquiries. We’ve included The Credit People in our list of best credit repair companies because the price is right and the guarantee is even better. The idea is that Experian Boost allows you to get credit for on-time payments to utility bills and regular services that may not normally count.
If your credit score is not as high as you’d like it to be, you’re not alone. Roughly one-third of people in a recent study1 had credit scores lower than 620 (well below the “good” range for the three main credit reporting agencies Equifax, Experian and TransUnion). Late or missed payments may cause your program to be canceled and in that event, this estimate would not apply to you. These organizations provide counseling and assistance to individuals struggling with debt, offering services like debt management plans and negotiations with creditors to reduce interest rates or fees. They also provide educational resources to promote financial stability. Non-profit status often means a focus on client needs rather than profit.
