How Do Credit Repair Companies Work to Fix Your Credit?

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A good credit score is essential. Without it, you will pay higher insurance rates, and access to low-interest loans such as car loans or mortgages becomes a challenge. However, if you already have a bad credit rating, all hope is not lost as you can search for the best credit fixing company to help boost your credit score. Because you are expected to pay a fee to get the services of a credit repair company, it’s best to have a clear understanding of how they operate. After all, the last thing you want is to waste your hard-earned money.

Without further ado, let’s look at how credit repair companies work to fix your credit.

What’s a Credit Repair and a Credit Repair Company?

First, you want to understand what a credit repair is before getting to know how they fix your credit. Credit repair is a process whereby a third party, usually a credit services organization, restores your bad credit rating by removing negative information such as delayed or missed payments and inaccurate or outdated information. Credit repair companies can remove such information because they liaise with financial companies such as your debt collector or bank and credit bureaus such as TransUnion and Experian.

Usually, there’s a lot of deliberation during the credit repair process. However, you shouldn’t give up, as the credit repair process aims to eliminate any misleading information that’s negatively affecting your credit rating.

The credit repair company is a firm that helps you improve your credit rating at a fee, which can either be charged per detail deleted from your credit report or monthly. How much you’ll spend differs from one credit repair company to another, but it typically sums up to hundreds or thousands of dollars annually. With that said, you need to carefully examine a credit repair company before choosing one because some aren’t legit.

How Do Credit Repair Companies Work to Fix Your Credit?

While you can handle credit repair by yourself and save hundreds or thousands of dollars, working with a credit repair company is usually the best option as they make things a lot easier. Here are the steps followed by a credit repair company when looking to fix your credit.

Step 1: Free Assessment

After hiring them, the first thing a credit repair company does is request your credit report from the different bureaus, including TransUnion, Experian, and Equifax. Consequently, the repair expert will examine your report to gauge whether they can offer you the needed assistance. If they can be of help, they’ll go ahead and help you remove the items that are causing you to have a negative credit score.

Step 2: Identify Items to Dispute

This step entails a detailed review of your credit report to check for possible errors and mistakes. It’s a process that entails checking expired negative items, duplicate accounts, and your payment history. If there are any errors in your reports, the credit repair company proceeds to collect the necessary documents required for supporting your argument. Consequently, they’ll send these documents to the relevant credit bureaus to support your case on items that need to be removed from your credit report.

Step 3: Repeat This Process for Each Credit Bureaus Report

A reliable credit repair company should examine reports from the three different bureaus because the information contained is not always the same. This is usually the case because every credit reporting company has its separate “data furnishers,” which refers to credit unions, loan institutions, banks, credit card issuers, and mortgage lenders. Usually, data furnishers don’t report to each of the credit bureaus. Therefore, an error might not be noticed should a credit repair company fail to examine the three different reports.

How Much Will the Credit Repair Cost?

Getting the services of a credit repair company doesn’t come cheap and how much you’ll be charged differs from one company to another. Typically, you’ll be expected to pay a startup fee that ranges between $10 to $200. This fee might cover account setup and first credit review, but this usually differs from one credit repair company to another.

After clearing the startup fee, you’ll be required to pay a monthly fee, which typically ranges between $50 to $100 each month. If you wish for extra services such as credit monitoring, you’ll be required to pay an additional fee for such a service. When searching for a credit repair company, it’s best to choose one that offers you a free consultation for its services. This is vital to help you figure out whether they provide quality services before spending your money. If not, they should at least offer a money-back guarantee because credit repair services aren’t cheap, so you undoubtedly deserve quality services.

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