If you have a less-than-stellar credit score, you most likely are thinking about hiring a credit repair company. But before you even start examining the different credit fixers to determine which one to hire, it’s best first to learn how these firms work in repairing your credit score. This way, you’ll better understand whether it’s worth it paying the credit repair company and not do all this by yourself.
This article will feature a deeper look at how credit repair companies work to repair your credit score. By understanding this, you’ll be able to determine which firm is best suited to your needs.
What’s A Credit Repair Company?
Your credit score must always be examined when looking for a loan. As a result, this consequently affects the loan terms and interest rates. Because of this, you must always strive for a lower credit score. But if you already have a bad credit score, don’t lose hope already because credit repair companies come to your aid during such times.
A credit repair company is essentially a third-party firm that offers services to boost your credit score, usually at a fee. Using their expertise, this company knows the techniques and strategies that can help boost your credit score over time by removing negative or incorrect information. Because such can be somewhat challenging for the average individual, this is enough reason why you need to work with a credit repair company. In addition, the credit repair company is also responsible for assisting you to;
- Determine how your credit score is calculated
- Comprehend and assess your credit reports
- Determine strategies that’ll continuously help build your credit score
How Does A Credit Repair Company Work?
The role of the credit repair company is to assist you when disputing any incorrect details present on your credit report, including foreclosures, bankruptcies, and late payments. With the help of this company, you’re in a position to improve your credit history. As a result, you’ll be one step towards improving your overall credit rating, hence being guaranteed access to loans. The three steps followed by the credit repair company are;
1. Free Evaluation
The first thing a credit repair company does during the journey to fix your credit score is to get your credit report. They do this by contacting the three credit bureaus: TransUnion, Experian, and Equifax. Subsequently, they’ll have a repair specialist go over your credit report to find out how exactly they can offer assistance to you. If any inaccurate or negative information is found, you’ll be identified that you indeed require their credit repair services.
2. Pinpoint Things To Dispute
The next step by a credit repair company is to go through your reports to check for possible errors and mistakes. This is done to find any misleading information that’s negatively affecting your credit score. It usually includes duplicate accounts, expired negative items, and errors in the payment history. Consequently, they’ll proceed to have such items removed from your credit report, and the different ways they do this include;
- Sending on your behalf cease-and-desist letters to debt collectors
- Requesting the validation of information on your credit report
- Writing letters to contest inaccurate and negative marks
In addition to this, credit repair companies help you pinpoint any errors on your credit reports to help prove your case.
3. Get Credit Reports From The Different Bureaus
Credit bureaus usually use different information to create a credit report. Because of this, it’s advised you work with a credit repair company that compiles reports from these different bureaus. This is vital because it ensures the credit repair company doesn’t miss any error which could be affecting your credit score.
How Much Does It Cost To Hire A Credit Repair Company?
Paying for the services of a credit repair company doesn’t come cheap. Typically, the payment for their services can be charged per every derogatory mark the company removes or a one-off flat fee. The fee can also be charged monthly, ranging from $50 to $150 or beyond in some cases. In addition, you might be required to pay an access fee or set up fee.
With that said, how much you pay for the services of a credit repair company differs depending on the specific rules they follow. Therefore, you need to have an open mind regarding how much money you’ll be expected to spend when hiring a credit repair company. And with their assistance, you’ll be able to repair your credit score effectively.
Interesting Related Article: “5 Tips for Finding a Legitimate Credit Repair Specialist“