It’s not uncommon to feel like your world is ending when you learn that a credit reporting agency has flagged your file with a less-than-ideal score. What you might not know is how these agencies operate and what actions you can take to raise your rating, so don’t panic just yet. There are many ways to improve your credit score. One of them involves hiring the services of a reputable credit repair company. In this blog post, we’ll look at some important questions that will help you determine if a particular organization is trustworthy, or not.
What is a Credit Repair Company?
Credit repair companies help consumers with low credit scores bring their credit back to a healthy state. Normally you can take control of your own credit by following a few simple steps. However, if you have a low credit score, you may find that it’s impossible to get a loan, or even be approved for a credit card without assistance. A credit repair company can help you get back on track with your credit, thereby allowing you to obtain a loan, or make larger purchases. Credit repair companies work with credit reporting agencies (CRAs) to dispute and remove negative information from your credit history. Some organizations also specialize in helping people obtain a free credit report. Credit repair companies generally charge a fee for their services. These fees can vary depending on the company, the services they provide, the level of financial need, the type of credit report they’re working with, and the length of the contract.
How to Tell if a Credit Repair Company is Legit.
If you’re at the point where you’re considering hiring a credit repair company, then you’ve likely encountered some issues with your report. But how do you know which credit repair company to trust? If you happen to come across a company that offers to repair your credit for free, proceed with caution. These kinds of offers are nearly impossible to keep up with, which means that they likely won’t result in any positive changes. If a company guarantees a specific outcome, make sure they possess the tools and skill set necessary to achieve it. Ask yourself the following questions to determine if a credit repair company is legit:
► Does the company have a solid track record?
► What experience do they have in the industry?
► Do they work with consumers with low credit scores?
► How do they charge for their services?
► Do they guarantee their work?
If a company seems to check out in these areas, they might be a good candidate to help you with your credit repair.
5 Steps Before Hiring a Credit Repair Company
Before you rush out and hire the first credit repair company you see in a Google search, there are a few things you should consider. This list of six items will help you gauge the legitimacy of a credit repair company, as well as help you determine if they’re the best option for your particular situation.
1. Know What You’re Looking For - When you start shopping around for a credit repair company, it’s important that you know exactly what you’re looking for. You should have a good idea of what type of services you need, your desired timeline for the process, and the price range that you’re comfortable with. Having a clear understanding of these factors will help you find a company that will suit your needs.
2. Compare and Contrast Companies - Once you’ve decided how you want to proceed, start actively comparing and contrasting various credit repair companies. Consider the services they offer, their pricing and payment plans, the experience of their staff, and the type of clients they serve. By taking the time to compare a few different organizations, you’ll be able to find one that best suits your needs.
3. Check Out the BBB - Another good way to gauge the legitimacy of a credit repair company is to check out the company’s rating on the Better Business Bureau’s website. The BBB is a non-profit organization that publishes information on thousands of companies nationwide. If you see that a company has a poor rating and lots of negative reviews, it’s probably best to skip them.
4. Ask For References - When you’ve found a few credit repair companies that seem like a good fit, ask them for references. References are people who can tell you if they’re trustworthy and provide insight into their services.
5. Be Wary of Scams - Be wary of credit repair scams. Companies love to prey on people who are desperate to repair their credit, so it’s very important that you remain cautious and skeptical. Scammers can be difficult to identify, so keep an eye out for the following signs.
► Being approached by a cold caller who wants to discuss your credit.
► Getting calls from numbers that show up on your phone as “obscene or suspicious.”
► Being asked for upfront payment for services that you’ve yet to receive.
►Finding credit repair websites that promise to remove negative information from your report for free.
3 Things to Avoid When Hiring a Credit Repair Company
While credit repair companies can be incredibly helpful, there are some things you should try to avoid when hiring one. Here are three things to watch out for:
1. Going with the Cheapest Option - It’s natural to want to go with the cheapest option, but this can often lead to hiring a company that won’t provide quality service. Be careful not to go with a company that’s simply the cheapest because unless they also happen to meet all your needs, you might just end up having to pay more in the long run if they can’t deliver the results you need.
2. Hiring a Company That Charges a Large Upfront Fee - While it’s not uncommon to see credit repair companies charge a fee upfront, it’s also somewhat suspicious to see companies that charge a large fee upfront. Make sure that you’re not signing up for a credit repair company that requires a large upfront payment without a full understanding of why they’re charging it.
3. Hiring a Company That Makes Unrealistic Promises - If a company promises to remove ALL negative information from your credit report- consider it a red flag. Credit repair companies can help you remove negative information from your credit report, but they can’t do it overnight and they can’t usually guarantee total elimination.
Conclusion
Credit repair is something that many people will have to deal with at some point in their lives, but doing it alone can be tricky, or even impossible. Credit repair companies can help you improve your score by disputing errors on your report, negotiating with creditors, and helping you create a repayment plan, but it’s important that you know what to look for in a credit repair company before hiring one. By understanding what to look for you can be sure that you’re working with a legitimate organization. Before hiring a company, make sure that they offer the services you need, have a solid track record, and charge an affordable rate.
