Credit Repair Companies: Pay Attention to These 5 Things Before Signing Up

Credit Repair Companies: Pay Attention to These 5 Things Before Signing Up
Lauren Ward
on December 8, 2017
Read in 4 min

If you’re thinking about credit repair, there are five things you should look for in a credit repair company before signing up.

First, understand that credit repair companies cannot do anything that you cannot do yourself.

They’re popular because reputable credit repair services are experts that understand the law and have experience working with credit reporting agencies.

You pay them a fee for the convenience and their expertise, usually as one-time service fee and a subsequent monthly fee.

It’s important to understand that credit repair services don’t help you pay off debt, nor are they in the business of debt consolidation.

They also can’t likely wipe out all of the bad credit on your reports.

If you’re wondering, “How can a credit repair company fix my credit?” then keep reading.

Typically, credit repair agencies work by analyzing your credit reports from the three major reporting agencies: Experian, TransUnion, and Equifax.

They then target items on your credit report that may be incorrect, out of date, or lacking proper documentation.

A letter will then usually be sent challenging these items individually.

If the item is incorrect, has been incorrectly attributed to you, or the reporting company doesn’t have proper documentation, the line will be removed by the credit reporting agency.

While these are the basics of credit repair, each agency may handle your account differently.

Charges and services also vary among credit repair companies.

Below is a list of five things you should look out for before signing up, as well as some recommendations for reputable agencies that can help repair your credit.

Need Cash? Get a Personal Loan Today

$5,000
I want to borrow
$1,000
$5,000

Understanding the Cost of Credit Repair

Credit repair isn’t expensive, but there are costs involved.

Credit repair agencies usually charge a setup fee and a monthly fee for their services.

One thing to look out for when searching for a reputable credit repair firm is an upfront fee.

The Credit Repair Organizations Act (CROA), signed into law in 1996, forbids credit repair agencies from demanding advance payment.

Costs vary from company to company, but upfront service fees can be around $20 to $100.

Monthly costs could be about $60 to $100, but additional services can make it higher.

You Should Never Sign a Written Contract

CROA also protects consumers in a few other ways.

It gives you certain rights to be able to cancel services and states that companies may not force you into a written contract.

When looking for a company to help you with your bad credit, look for a reputable agency that allows you to cancel at any time.

There should never be a case where you are locked into a contract or unable to cancel.

Be Wary of Credit Repair Companies That Offer a Guarantee

Credit repair services should work hard to repair your bad credit, but they shouldn’t offer a guarantee of results.

The federal Fair Credit Reporting Act (FCRA) gives you the right to challenge items on your credit report, and credit repair agencies use this and other laws to serve you and protect your rights.

However, if the report is accurate, verifiable, and timely then there may be nothing anyone can do to have an item removed from your report.

Any company that promises to have an item removed or promises to improve your credit is over-promising and shouldn’t be considered reputable.

Don’t Let Anyone Pressure You to Do Anything Illegal

Reputable credit repair agencies work within the law to protect your rights and improve your credit.

A reputable agency would never ask you to do anything illegal.

Be wary of companies that ask you to open lines of credit using false information.

Creating a new credit identity runs afoul of many federal laws and can get you into a lot of hot water.

Any company that asks you to do so is not only disreputable, but downright criminal.

Credit Repair Agencies Should Have a Track Record of Success

Credit repair agencies should have a proven track record of success.

While they can’t offer you a guarantee that they can fix your credit, they should demonstrate past success with clients.

When deciding to work with a particular credit repair agency, look at their track record, talk with friends, and read reviews.

You should also be able to contact them directly to discuss their process and their success rate.

With that in mind, here are three credit repair agencies to consider.

Lexington Law

Lexington Law is a large group of lawyers and paralegals that have been helping customers repair their credit since 1992.

Lexington Law’s Concord Standard service costs $89.95 to set up and $89.95 per month.

Couples, family members, and members of the armed forces are eligible for a $50 discount.

With their Concord Standard program, Lexington Law challenges credit bureaus to have incorrect or misfiled information removed from your credit report.

CreditRepair.com

CreditRepair.com offers not only credit repair, but credit monitoring as well.

The setup cost is just $14.95 and they charge $99.95 per month.

While the set up fee is one of the lowest in the industry, their monthly fee seems to be a bit high at first glance.

However, when you consider that they include credit monitoring from their partnership with TransUnion, it really is a bargain.

Plus, CreditRepair.com has over 20 years of experience to stand behind.

The Credit People

For those that are not fans of monthly fees, The Credit People offer you the option to pay up-front.

Setup fees are $19.95 no matter which plan you choose.

You can choose to pay $69 per month, one of the least expensive options of any company, or you may choose to pay a flat fee of $299 for six months of service.

If you pay up-front, which is not required by law, The Credit People will also waive the $19.95 setup fee.

Other Options for Credit Rescue

Credit counseling and repair services are just one step consumers can take towards better financial health, but there are other alternatives too.

Some people with overwhelming credit card debt find relief by consolidating debt with a personal loan.

With potentially just one loan payment to make each month vs. multiple credit card balances, it’s not hard to see why this is an appealing option.

By using our site to request a loan, we may be able to connect you with a lender from our network. If you’re approved, the lender can send you the rates, fees and terms of the loan so you can review it for yourself.

LendGenius.com makes it easy to get started, try our simple online form now.

Need Cash? Get a Personal Loan Today

$5,000
I want to borrow
$1,000
$5,000
Lauren Ward Finance Journalist

Lauren Ward is a freelance content writer focusing on personal finance, real estate, and lending.

Her work has been featured on Huffington Post, CBS News, and Kiplinger.

She previously worked at the Federal Reserve Bank of Richmond as well as several national non-profit organizations.

Recommended for Business Loans
Lendio
Lending Express

Important Disclosures. Please Read Carefully.

Persons facing serious financial difficulties should consider other alternatives or should seek out professional financial advice. This website is not an offer to lend. Lendgenius.com is not a lender or lending partner and does not make loan or credit decisions. Lendgenius.com connects interested persons with a lender or lending partner from its network of approved lenders and lending partners. Lendgenius.com does not control and is not responsible for the actions or inactions of any lender or lending partner, is not an agent, representative or broker of any lender or lending partner, and does not endorse any lender or lending partner. Lendgenius.com receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer. Regardless, Lendgenius.com’s service is always free to you. This service is not available in all states. If you request to connect with a lender or lending partner in a particular state where such loans are prohibited, or in a location where Lendgenius.com does not have an available lender or lending partner, you will not be connected to a lender or lending partner. You are urged to read and understand the terms of any loan offered by any lender or lending partner, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you. By submitting your information via this website, you are authorizing Lendgenius.com and/or lenders and lending partners in its network or other intermediaries to do a credit check, which may include verifying your social security number, driver license number or other identification, and a review of your creditworthiness. Credit checks are usually performed by one of the major credit bureaus such as Experian, Equifax and Trans Union, but also may include alternative credit bureaus such as Teletrack, DP Bureau or others. You also authorize Lendgenius.com to share your information and credit history with its network of approved lenders and lending partners. For qualified consumers, our lenders offer loans with an Annual Percentage Rate (APR) of 35.99% and below. For qualified consumers, the maximum APR (including the interest rates plus fees and other costs) is 35.99%. All loans are subject to the lender’s approval based on its own unique underwriting criteria. Example: Loan Amount: $4,300.00, Annual Percentage Rate: 35.99%. Number of Monthly Payments: 30. Monthly Payment Amount: $219.36. Total Amount Payable: $6,581.78 Loans include a minimum repayment plan of 12 months and a maximum repayment plan of 30 months. In some cases, you may be given the option of obtaining a loan from a tribal lender. Tribal lenders are subject to tribal and certain federal laws while being immune from state law including usury caps. If you are connected to a tribal lender, please understand that the tribal lender’s rates and fees may be higher than state-licensed lenders. Additionally, tribal lenders may require you to agree to resolve any disputes in a tribal jurisdiction. You are urged to read and understand the terms of any loan offered by any lender, whether tribal or state-licensed, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Lender’s or Lending Partner’s Disclosure of Terms.

The lenders and lending partners you are connected to will provide documents that contain all fees and rate information pertaining to the loan being offered, including any potential fees for late-payments and the rules under which you may be allowed (if permitted by applicable law) to refinance, renew or rollover your loan. Loan fees and interest rates are determined solely by the lender or lending partner based on the lender’s or lending partner’s internal policies, underwriting criteria and applicable law. Lendgenius.com has no knowledge of or control over the loan terms offered by a lender and lending partner. You are urged to read and understand the terms of any loan offered by any lenders and lending partners and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.