Credit repair services don’t do anything that you cannot do for yourself. Furthermore, outside of correcting glaring errors, there are no quick fixes where credit repair is concerned, despite claims to the contrary made by disreputable credit repair firms. But a successful credit repair process can pay dividends in a higher FICO score – and better credit terms. Credit repair companies work with you to devise a systematic plan of action to deal with your credit problems. Credit repair professionals also devote time and effort that you may not be willing or able to set aside to pursue the necessary steps to correct errors in your credit report.
Staffing and Credentials
When you contract with a credit respire company, you’re entrusting sensitive personal and financial information, including your Social Security number and banking information to complete strangers. That’s a necessary part of the process. However, unscrupulous operations utilize questionable practices that not only skirt (and sometimes exceed) legality. At worst, you may find yourself the victim of credit fraud or identity theft that can leave you in worse financial shape than before you started. Avoid being victimized by practicing due diligence to ensure that the credit repair company you hire is reputable as well as competent.
With the exception of the state of Florida, look for companies that are registered with your state attorney general’s office or with another state-wide consumer protection agency. In Florida, check out credit repair companies through the Better Business Bureau or a similar national consumer watchdog service. Staff members handling sensitive information should be bonded. Ideally, licensed legal professionals should be on staff as well.
- Association for Financial Counseling and Planning Education (AFCPE)
- Association of Independent Consumer Credit Counseling Agencies (AICCCA)
- Better Business Bureau
- Council on Accreditation (COA)
- International Standards Organization (ISO)
- National Association of Certified Credit Counselors (NACCC)
- National Foundation for Credit Counseling (NFCC)
Short-Term Credit Repair
If money is tight, obtaining short-term credit repair services can give you a head start on shaping up your credit report and boosting your FICO score, while allowing you to execute the bulk of the actual footwork. At minimum, you should receive an in-depth analysis of your credit report and FICO score along with insight on which areas of your financial profile need work. You should also have access to extensive (and free!) materials through the company’s website, including templates for dispute letters to challenge inaccurate credit report items. A dedicated account manager should also be assigned to your case.
Long-Term Credit Repair
If you can afford it, long-term credit repair provides s professional approach to your credit problems. Your dedicated account manager does the heavy lifting of submitting forms and disputes. You should be aware that it usually takes at least 60 days to begin to results from the credit repair process. However, you should also beware of credit repair companies that lock you into a 12-month-plus contract. Reputable companies work on a month-to-month basis. The Credit Repair Organizations Act of 1996 also provides specific protections which must be honored by credit repair companies. If any of the following conditions are not met, seek the services of another credit repair company.
- A written contract clearly spelling out the agreement (services, payment, etc.)
- A “cooling off” period of three business days to cancel the contract (in writing)
- A written statement of your rights as a consumer concerning your credit
- An accurate representation of services that can and cannot be provided
- Credit score updates
- Ongoing credit counseling and financial advising
Services and Support
Support should be readily available by telephone during extended business hours and by email with a reasonable turnaround period for responses. Live online chat support is also desirable. Other desirable features include online and telephone registration.