Are you struggling to rebuild your credit after facing financial setbacks?

Credit repair companies are there to help you improve your credit score. 

What do they do?

When I first heard about credit repair companies, I was curious.

How do they actually fix people’s credit? Is it complicated? Is it something I can do myself?

So, I did some research, talked to people who have used these services, and even spoke with a financial advisor. 

Here’s what I found.

Even the best credit repair companies don’t pull off any magic tricks. 

But they do have strategies, tools, and expertise that can help you repair your credit faster than doing it alone.

This guide will break down exactly how credit repair companies work, step-by-step. 

I’ll also share my own thoughts on whether it’s worth it to hire them or if you should try fixing your credit on your own.

How Do Credit Repair Companies Fix Your Credit? 

Credit repair companies help fix your credit by following a process. Here’s what they usually do.

Credit Repair Companies Review Your Credit Report

Before any real credit repair work begins, the first thing these companies do is review your credit report.

And not just a quick glance.

They comb through it.

Why? 

Because mistakes on credit reports are more common than you think.

Here are some examples of errors that could be dragging your score down:

• Incorrect account balances
• Wrong personal information (names, addresses, etc.)
• Old debts that should no longer be on your report
• Duplicate accounts

Credit repair companies look for any inconsistencies or incorrect information that could negatively impact your credit score.

Pro Tip: You can do this part yourself for free by requesting your credit report from Equifax, Experian, or TransUnion. Everyone is entitled to one free report per year.

But, credit repair companies are experts at finding even the smallest errors that can impact your score. 

They know exactly what to look for and often catch things you might miss.

They Dispute Errors with Credit Bureaus

Once they find mistakes on your credit report, the real work begins.

This is where credit repair companies earn their keep.

They dispute these errors with the credit bureaus.

In simple terms, they contact Experian, Equifax, or TransUnion and say, “Hey, this information is wrong. You need to correct it.”

Now, here’s where it gets tricky.

Credit bureaus legally have to investigate disputes. They must respond within 30 days.

That means when a credit repair company files a dispute, the credit bureau is required to check their records and verify the information.

If they can’t verify it, they remove it.

Result?

The negative information disappears, and your credit score goes up.

Credit Repair Experts Knows How To Negotiate with Creditors

Sometimes, the problem isn’t a mistake in your report.

Maybe you missed a few payments or defaulted on a loan. That stuff is harder to erase.

But credit repair companies have a strategy for this too.

They’ll contact your creditors and negotiate on your behalf.

For example, they may ask your credit card company to remove a late payment from your report in exchange for paying off the balance. 

This is called a “pay-for-delete” agreement.

In other cases, they may negotiate a debt settlement. This means you pay less than the full amount you owe, and the creditor agrees to mark your account as paid on your credit report.

Does this always work?

No. However, credit repair companies have relationships with creditors and understand the negotiation process. That gives them an edge.

How Do Credit Repair Companies Remove Negative Items with Goodwill Adjustments?

Ever heard of a goodwill adjustment?

It's like asking for a favor from a friend. 

It’s when a creditor agrees to remove a negative item from your credit report simply because you ask them nicely.

Yes, it’s that simple.

But here’s the catch. Creditors don’t have to make these adjustments. They’re under no obligation to remove negative items unless they are truly mistakes.

So, why would a creditor agree?

Credit repair companies know how to make the right kind of request.

If you’ve been a good customer overall but maybe missed a payment once or twice, credit repair companies will write a letter explaining your situation and asking the creditor for leniency.

If the creditor agrees, those missed payments come off your credit report, and your score goes up.

Does credit repair get rid of debt? Credit repair companies can help you remove negative marks from your credit report, but they can't get rid of your debt. You still need to pay off your debts, even if the negative marks are gone.

Here's a summary of what credit repair companies can and can't do:

• Can: Remove negative marks from your credit report if they are mistakes or if the creditor agrees to a goodwill adjustment.
• Can't: Even the most aggressive credit repair company can’t get rid of your debt. You still need to pay it back.

Remember, credit repair is one part of improving your financial health. It's important to also pay your bills on time and avoid taking on too much debt.

A Credit Repair Specialist Can Help You Manage Your Credit Utilization

Your credit utilization ratio plays a big role in your credit score.

What’s that?

It’s the amount of available credit you’re using.

For example, if you have a $5,000 credit limit and you’ve used $2,500, your utilization is 50%. Experts recommend keeping your utilization below 30%.

If your utilization is too high, it can drag your score down.

A credit repair company may suggest some strategies to lower your utilization, like:

• Paying down balances on your credit cards
• Requesting a higher credit limit (which lowers your ratio)
• Avoiding opening new accounts, which could hurt your score short-term

While you don’t need a credit repair company to lower your credit utilization, they do offer personalized advice on how to best manage it based on your specific financial situation.

Establishing Positive Credit Habits

Credit repair isn’t just about removing negative items.

It’s also about building a positive credit history.

Repair companies help you establish new habits that will boost your score over time. Some of their advice might include:

• Always pay on time. Payment history accounts for 35% of your credit score.
• Keep credit card balances low. Don’t max out your cards.
• Limit new credit inquiries. Too many can hurt your score.
• Use credit responsibly. Paying off your balance in full each month is ideal.

In some cases, they may even recommend applying for a secured credit card if you need to rebuild your credit from scratch. 

Secured cards require a deposit and are easier to qualify for, but they still help you build a positive payment history.

Monitoring Your Credit Regularly

Another service credit repair companies offer is credit monitoring.

This means they keep a close eye on your credit report and notify you of any changes or suspicious activity. Monitoring your credit can help you spot problems early, like identity theft or incorrect information.

But here’s a little secret: You can monitor your credit yourself.

Many services like IdentityIQ or Experian offer free credit monitoring. 

So, while this is a nice perk, it’s not exclusive to credit repair companies.

Credit Repair: Can You Do It Yourself?

By now, you might be wondering, “Can’t I just repair my credit on my own?”

And the answer is: Absolutely.

Everything credit repair companies do, you can do yourself. You can:

• Review your own credit report
• Dispute errors with the credit bureaus
• Negotiate with creditors
• Make goodwill requests
• Establish positive credit habits

But it’s time-consuming. And if you’re not familiar with the process, it can be overwhelming.

That’s where credit repair companies come in.

They handle the tedious work for you. They know what to look for and how to get things done quickly. 

So, if you don’t have the time or don’t feel comfortable dealing with creditors, they can be a valuable resource.

Are Credit Repair Companies Worth It?

Credit repair companies aren’t free. Most charge a monthly fee that can range from $50 to $300, depending on the services they offer.

So, are they worth it?

It depends on your situation.

If you have a lot of errors on your report or significant negative marks that you can’t seem to fix on your own, hiring a credit repair company could save you time and stress.

But if your credit issues are relatively minor, you might want to try fixing your credit yourself.

How fast can a credit repair company fix your credit?

Credit repair companies can usually fix your credit in a few months. They work hard to find mistakes on your credit report and talk to banks to help you. But it takes time.

Sometimes, it might take longer to fix your credit if you have a lot of problems. But don't give up! Keep working with your credit repair company, and you'll see results over time.

Pro Tip: Always do your research before hiring a credit repair company. 

Some are legitimate, while others are scams. Make sure the company you choose is reputable, and read reviews from other customers.

How To Spot Legitimate Credit Repair Companies

Are you considering hiring a credit repair company to improve your credit score? 

Before making a decision, it's crucial to understand how to spot legitimate companies and avoid scams. 

Make sure you...

1. Do Your Research

• Check online reviews: Look for credit repair reviews from real customers on websites like Google Reviews or Trustpilot.
• Research company history: How long has the company been in business? What is their track record?
• Verify credentials: Make sure the company is licensed and registered to operate in your state.

2. Beware of Scams

• Avoid unrealistic promises: Be cautious of companies that guarantee a certain increase in your credit score within a short period.
• Don't pay upfront fees: Legitimate credit repair companies typically charge monthly fees. Avoid companies that ask for upfront payments.
• Verify communication: Always verify the company's contact information and be wary of unsolicited calls or emails.

3. Ask Questions

• Understand the process: Ask the company to explain their step-by-step process for repairing credit.
• Inquire about fees: Clearly understand the costs involved and any additional charges.
• Ask about success rates: Inquire about the company's success rate in improving credit scores.

4. Trust Your Gut

• Don't be pressured: If a company seems too pushy or aggressive, it might be a red flag.
• Go with your instincts: If something feels off, don't hesitate to walk away.
• Remember, it's important to take your time and do your research before choosing a credit repair company. 

By following these tips, you can increase your chances of finding a reputable and trustworthy company that can help you achieve your financial goals.

Credit Repair Companies vs DIY Comparison Table

Ultimately, the best approach depends on your individual circumstances and preferences. 

If you have limited time, complex credit issues, or prefer a hands-off approach, hiring a credit repair company might be beneficial. However, if you have the time and patience, you can also successfully repair your credit on your own.

My Personal Experience with Credit Repair

To be honest, I was skeptical about credit repair companies at first.

I had heard horror stories about people paying hundreds of dollars and seeing no improvement in their credit scores. But I also heard stories of people who saw their credit score jump by 100+ points in a matter of months.

So, I decided to give it a try. I was able to see the effectiveness of credit repair services.

After a few months of working with a reputable credit repair company, my score improved by nearly 80 points. They were able to remove some old, incorrect debts and helped me negotiate with a creditor to delete a late payment.

Would I recommend credit repair companies?

Yes, but with caution. 

Make sure you’re choosing a legitimate company, and be prepared to put in some work on your own too.

Final Thoughts: Credit Repair Is Possible

Credit repair companies can be a big help in fixing your credit score. 

They know how to find mistakes on your credit report and talk to banks to help you. This can make it easier to get a loan or a job.

Remember, fixing your credit takes time and effort, but it's totally worth it. Choose a good credit repair company and follow their advice. With hard work, you can get your credit back on track and reach your goals.

Don't wait any longer. Take the first step towards a better financial future by contacting ASAP Credit Repair. We can help you get started and answer any questions you may have.