Credit repair can cost you anywhere from being absolutely free to around $400, depending on the three repair options you have. If you want to repair your own, you can do it for free. There are some associated costs, but it really goes beyond $30. The second credit repair option is using credit repair software. This will require anywhere between $13.99 to $400 per month. The final credit repair option is the professional credit repair service from around $30 to $100 plus a one-off fee of $15 to $100 for setting up.
Credit repair companies do not have a magic wand where they wave away your bad credit. In fact, there is little they do that you cannot do it yourself. So why should you pay for a credit repair service when you can repair your own credit? Well, credit situations are all different. Some factors that damage credit can be fixed with ease, while others require expert consultation.
This article discusses the options people with bad credit have when it comes to credit repair.
The Cost of Credit Repair
How do I get rid of bad credit?
As stated, you can get rid of bad credit using three proven methods, each with a different implication and cost. The prices are specific to your circumstances and the individual service you go for, but we will provide a range. Here is what you should pay for credit repair:
- Repairing your own credit: free, not more than $30
- Credit repair software: monthly fee of between $13.99 to $400
- Professional credit repair services: monthly fee of between $30 to $100 plus a setup fee of between $15 to $100
How do I fix my credit for free? Repairing your own credit?
If you want to fix your bad credit for free, then you have to repair it on your own. The only charges that may hit you are the nominal mailing charges. But, if you use the dispute portals online, then expect zero charges. These portals are offered by every credit bureau.
Most charges involved when repairing your own credit come when sending your dispute via physical mail, hence the mailing charges. Experts advise sending letters because this way is proving more successful than the online portals.
When you send physical letters to the credit bureaus, do so with registered mail. Each letter should cost around $6.59, so you will spend about $21 for the three letters. Do-it-yourself credit repair is the cheapest way to get rid of bad credit.
How much does credit repair software cost?
Using a credit repair software is basically the middle ground between repairing your own credit and seeking expert credit repair services. What you get is a software that enables you to make disputes by yourself.
There are different levels of credit repair software. The higher the software level, the more the services, but also the more the cost. The basic credit repair software, for example, are on the low end of the price range, but they offer very little. The comprehensive services, however, can cost beyond $200 a month. Now, this is a lot, considering most credit problems are brought by a lack of money. There are mid-level credit software that can benefit those who cannot part with over $200 every month.
Is it worth paying someone to fix your credit?: Professional credit repair services
This involves hiring a professional to fix your credit. Remember, the professional credit repair companies do exactly the same thing you would do when repairing your credit. The difference is you will have a licensed attorney who will make the disputes for you.
If you opt for the full-service credit repair, you give the repair company the permission to pull your credit reports; most of the time, you pay a fee for this. They then review your credit report to find out what the issue is and start the process of making a dispute for you. They will keep you posted. Your role will be to:
- Make confirmation of the negative information in your credit report. They will ask if that information is correct or errors.
- Also, you will provide any document proving you have an error in the report.
Most of the professional credit repair services will ask for a setup fee to open an account and pull up your report and then the monthly fee, which you will pay each month you are registered with the repair company. The resources offered by different companies may vary, each trying to attract more customers. Some of the companies have premium programs that have specialized services, such as making you mortgage-ready if your goal is to buy a house.
Some of the services that credit repair companies offer
- Credit score monitoring
- 3-bureau credit monitoring
- Fraud protection
- Credit score simulator
- ID theft insurance
- Financial coaching or other related training
- Mortgage lender referral and housing counseling
The more of these services you want, the higher your cost will be. Mortgage related credit correction will be particularly costly because of how hard it is to make someone with bad credit ready for a mortgage.
If you commit to a professional credit repair service, make sure they have state-licensed attorneys. The Credit Repair Organization Act states that only an attorney who is licensed to practice in your state can make a dispute on your behalf. Beware of scams in the credit repair business.
What makes paying someone to fix your credit worth it or not worth it is only paying for the necessary services. If you need a mortgage, for example, then spending a few hundred dollars is completely worth it, considering you will save tens of thousands due to better rates. But if you just want a better credit score and you do not need a new credit card or loan, then it is not worth paying for premium programs to repair your credit. Know your goals before going to the credit repair company.
The need for credit repair: good and bad credit score
Why would someone go through this trouble to repair their bad credit? Bad credit definitely comes at a cost. It affects every aspect of your life, from getting your dream job to owning the house of your dreams. People will bad credit will tell you some of the challenges they face include:
- High-interest rates on credit cards, mortgages, student loans, auto loans, etc
- Lenders and creditors unwilling to approve their loans
- High insurance premiums
- Unmanageable debts
- Fewer job opportunities
Bad credit will not only cost you money, but it will also reduce your financial options and affect your fiscal stability.
How to choose a credit repair company?
The credit repair industry is famous for having a lot of scams. This makes getting a legitimate company that works for your benefit an important task. Before jumping on board with any company that claims to be able to fix your credit worries, carry out in-depth research. If not, then it is better to repair your bad credit by yourself.
Remember, those repair companies have no special rights to do something you can’t when it comes to disputing the information. Companies that guarantee they can clear accurate but damaging information from your credit report have been warned by the FTC. They claim this with the hope of attracting desperate consumers with bad credit. Some even claim that they can help you establish a new identity.
There are laws that protect the consumer from unfair reporting and collection, as well as laws protecting consumers from repair companies that are misleading. Any reputable credit repair firm should not promise you outrageous results or something illegal. The first sign of a shoddy credit repair company is that they do not follow the rules.
A proper credit repair agency should also train you on how to handle your current credit accounts so as to prevent further damage. For example, they should advise you to pay the credit cards that are nearly maxed out.
The credit repair agency should also keep you updated every step of the process. Whether you are repairing your own credit or hiring someone to do it, you should be part of the process and know what is happening.
What is the best credit repair company?
Top three reputable credit repair agencies
There are many credit repair companies. Some of the dodgy ones are only there to scam unsuspecting consumers, but there are also others that are well established.
Choosing the right company to handle your credit issues is important. When it comes to this business, the following companies have proved to be the best of the bunch.
Lexington Law has to be among the top credit repair firms in the country. What makes Lexington Law so go is that they are an actual law firm specializing in credit law. This means they are masters when it comes to dealing with lenders.
Lexington Law is among the longest-serving repair companies, and its packages come with all the necessary steps for repairing bad credit. This includes credit report monitoring and protection from identity theft, which is a premium service.
When it comes to reliability, Lexington Law also has a high score. This is a credit to the 27 years of service the company has offered. Legally, this also meets the demands by the Credit Repair Organizations Act which requires companies to only charge for the completed work and not asking for advance payments.
The basic price of Lexington Law services is $89.95 per month.
CreditRepair.com is another reputable credit repair company around. The thing with CreditRepair.com is that they have a relationship with TransUnion, and therefore, they pull your credit report and score for you. This is very helpful because most companies charge for this.
CreditRepair.Com also boasts of an “A” rating from the Better Business Bureau (BBB). This high rating from BBB and its solid track record make CreditRepair.com highly reliable. Furthermore, they allow you to cancel any time if you feel like the agreed-upon tasks are not being completed satisfactorily. Again, this only strengthens the reliability of CreditRepair.com.
All these high rates mean that CreditRepair.com is a top-notch company that offers exceptional services. But for exceptional services, you are required to pay top dollar. This is the downside of CreditRepair.com. They charge $99.95 every month for their services. This will get you the usual credit repair services, a score tracker and analysis, mobile apps, monthly credit monitoring plus email and text alerts. There is also protection from identity theft. The services may be worth it considering you also do not pay some one-time fees that other repair companies will ask you for.
Sky Blue credit repair
Sky Blue has ticked all the boxes when it comes to credit repair. It is the most reliable and affordable credit repair options out there. Their prices are so friendly because they have cut out all the extra services and strictly focuses on credit repair. Concentrate on things like fixing errors in your credit report and not any extravagant programs.
Apart from it charging the affordable rates of $79 per month, they also have a great feature for people on a tight budget. This feature allows customers to pause their services on a click of a button to take a break during financially hard times. This is beneficial for budget-minded people when they are not able to afford the services anymore.
Sky Blue is reliable because it has been around for a number of years now. It has stood the test of time when it comes to reliability. Sky Blue has numerous positive reviews online, which are also backed with a high BBB rating. One thing that establishes the reliability of Sky Blue is the fact that they offer a full 90-day refund in case the customer is not satisfied with their credit result. This is the only credit repair company offering this important feature.
Can credit repair companies really help?
Do credit repair services work?
This is a question a lot of the credit repair company will take you around with, even the legitimate ones. Before someone makes a purchase, they want to be guaranteed that the product or even service will be of actual benefit. So that is what credit repair clients will ask before parting with about $100 a month.
Dodgy credit repair services will guarantee results overnight, that is simply impossible. These companies are experts at sweet-talking clients to throw away their money. After they give you the promises, they will ask you to pay upfront. If this is the case, leave.
Legitimate credit repair companies or at least the ones that are reputable and well-established will give you their averages and stats. They will show you the number of negative items they have previously removed from other credit reports. Others will go ahead to tell you how much they have raised the average credit scores of their clients. They will not only tell you about their previous success, but they will actually show you.
Reputable credit repair companies will tell you and show you their previous triumphs, but they cannot give you a 100% guarantee that their methods will work for you. In fact, legally, no credit repair company can promise its clients that they will be able to completely repair their credit.
The reason is, there are many variables involved in the credit reporting and repair process. You cannot accurately recommend a credit repair firm that will work with certainty. This is the case with more serious damages.
When it comes to errors and other inaccurate information on the credit report, as long as it can be proved, then credit repair will work for you. In fact, if you have the documentation that proves the errors, then you can initiate the repair process yourself.
Once again, a company that promises overnight results or those that promise a new identity should be avoided at all costs.
How long does it take to go from bad credit to good credit?
Everyone wants to know how long it takes to repair credit. They want to know if there is a fast credit repair service. Well, this all depends on a variety of things. The biggest being the amount of damage done to the credit.
That is, if your credit score is bad because of one error, for example. Removing this error will make your credit go back up very fast. However, years of late payments, debt-related issues such as bankruptcy, and other damaging information over the years can really mess up your credit. Negative information in your credit report that is accurate can remain on your credit report for seven to ten years.
Working with a credit repair company is a good way of getting rid of errors and cleaning up your credit report. But, you should also take measures to ensure you do not do anything that will further damage your score. Reckless financial habits will translate to having accurate negative information in your report.
Similar to how no reputable credit repair firm can promise clients specific results, they also cannot promise results within a specific timeframe. They might give you a general trend such as some improvements after two months and full results after six months. But then again, with your specific credit problems, it may vary.
How do I fix errors on my credit report?
A study conducted by the Federal Trade Commission found that 5% of consumers have credit reports with errors that could have a significant impact on their credit scores. These errors could mean that you pay higher interest rates or get denied credit altogether. It, therefore, literally pays to review your credit report and clean up any mess.
The Fair Debt Collection Practices Act and the Fair Credit Reporting Act protects everyone from unfair practices. Those laws say that your report should not have any outdated information, inaccurate entries, or multiple entries for the same debt. The multiple debts can happen when a collection agency takes over your debt collection.
Moreover, any information that cannot be proven has to be removed even if that information is accurate. If the information is later verified, then it may be reinstated back in your report.
Some of the errors that can be fixed by yourself or with the help of a credit repair company include:
- Legal actions such as bankruptcy that were not yours
- Accounts that are not yours
- Misspelling, which might affect your credit scores. For example, misspelling in your name might lead to someone’s negative entries mixing with your entries or even your positive entries not showing up at all.
- Debts that should have been removed from the report. Maybe because they have aged.
- Incorrect dates in the report.
- Debts that cannot be verified or validated.
Reputable credit repair companies will review your report to ensure no information appears that should not appear. If so, they will dispute the information on your behalf. Some go ahead and ensure the same information does not reappear.
Conclusion of how much credit repair costs
Credit repair is no doubt an expensive endeavor, with premium services costing $100 and beyond, every month. The process takes a couple of months. Considering all that, you might find yourself paying an excess of $500 to improve your credit score. Worse, it may not work as you desired.
However, if you hire a legitimate credit repair company, the few hundred dollars might be worth it. Having good credit can save you thousands of dollars in interest rates. Most importantly, bad credit will keep you away from achieving your dreams. You will not be able to afford your dream car, you will not be able to come close to your dream home, and your job opportunities will be limited.
If your credit problems are not serious, then you can definitely repair your own credit. This will save you the hefty charges. And besides, the credit repair companies are just doing what you can do on your own.