Credit
July 25, 2019

What Do Credit Repair Companies Do?

Written By Mary Beth Eastman
Last updated November 26, 2019

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Poor credit can cause a lot of additional financial problems. When you have poor credit, you often pay higher prices for car insurance, rent, and other necessities. Of course, you can also expect your credit card company to charge high interest.

If you have seen the problems associated with bad credit, you may have thought about hiring one of the best credit repair services to help. Before you hire anyone, make sure you understand what the companies do and whether you want to pay for those services.

A good credit repair company will review your credit history to find and remove mistakes. For example, Lexington Law will review your credit report and force any creditors not following FTC regulations to remove derogatory information from your credit report.

According to the Federal Trade Commission (FTC), about 20% of Americans have inaccurate information on their credit reports. Challenging those mistakes can help your credit rating improve quickly.

Eliminating inaccuracies usually involves:

  • Reviewing your credit report to find potential problems.
  • Writing letters to the credit reporting agencies and the company that reported the wrong info.
  • Sending cease-and-desist letters to debt collectors.

Credit card companies may also give you advice that helps you improve your credit rating. For example, they may tell you to:

  • Pay off high-interest credit card debt.
  • Stay current with all of your bills.
  • Get a secured credit card that requires money as collateral.

Hiring a credit repair company usually costs under $100 per month. It’s not a huge sum of money, but it’s money that people with bad credit may not have.

If you don’t want to spend it, then you can take credit repair steps on your own. Many people can review their credit histories and dispute inaccuracies without help from a professional. You can use the money you save to improve your credit even more.

Not everyone feels confident writing letters and confronting companies, though. If you would rather have someone else do the work, then a credit repair company may be the right solution to you.

Before you hire anyone, make sure you do some research to learn about the company’s success rates and experiences with other consumers. Most credit repair companies do good work. Others will try to drag out the process for as long as possible to take more money from you.

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