What's In This Article?
If you need credit repair, we feel your pain.
Back in 1992, we moved from Los Angeles, California to St. Louis, Missouri. We leased a great house in a beautiful neighborhood with an option to buy at a very reasonable price.
A couple of years into the lease we decided we’d try to buy the house. We knew it would be tough because we were self-employed and our income wasn’t that great. But we decided to go ahead and give it a try anyway.
So, we applied for a mortgage. The first thing the lender did was run a credit report. We were quickly informed that we had a couple of late credit card payments and if we didn’t get them cleared up it was going to make it impossible for the lender to give us the loan.
We tried to get those credit report dings removed on our own with no luck. We were discouraged and it looked like we’d have to remain renters at least for the time being.
Then, we heard about a lady in town who was an expert at clearing up credit report issues. We hired her and she was able to get those negative marks removed from our credit report within just a couple of weeks. As a result, we were able to buy that house.
Credit Problems Can Make Retirement Miserable
If you’re close to retirement, or maybe even retired already, and you have credit problems, you know how stress-producing they can be. Not only do credit issues limit your ability to qualify for mortgages or auto loans, but the invasive phone calls, emails, and threatening letters from collections departments can make it difficult to relax or sleep. Eliminating credit problems is important for those reasons and more.
Finding Credit Repair Assistance Is Easier Than it Used to be
The lady we hired to fix our problem was ahead of her time. As far as I can tell, there weren’t many large credit repair businesses running at that time. My research shows that there were a few as far back as the late 1970s but they were small local businesses. Now, there are a lot of them, some good, some not so good but all easily found via a quick Google search.
If you have credit issues and need help, we’re going to help you in a couple of ways. We’re going to give you a quick but thorough tutorial explaining what credit repair is, how it works, and what you need to be aware of so you don’t get taken advantage of.
Before we get to the nitty-gritty of credit repair, we’d like to make you familiar with two excellent credit repair services we’ve listed below. If you’d just like to learn more about credit repair, click here.
Credit RX America has a unique business model where you only pay once an item has been successfully removed from your credit report. They begin the dispute process, and you pay once an item has been removed, which can occur in as little as 30 days. They can help remove items that some companies cannot, such as tax liens, judgments, and medical collections. Credit RX America provides a comprehensive, hands-off approach where you do not have to do anything but tell them what you want to have removed, and they do the rest.
|😀 PROS||😡 CONS|
|No results, no fee||Cannot order your credit report for you|
|Can remove tax liens and judgements||Price is per each item deleted|
|Discounts for couples||Not all items can be removed|
When you begin the credit repair process, keeping track of your different creditors, banks, and collection agencies can be time-consuming and complicated. DisputeBee software automates the process and makes it easy. It walks you through the entire process by generating dispute letters, helping you keep track of what has been done, and helping you with the next steps. You can import your credit report and get started improving your credit score by removing eligible negative items.
|😀 PROS||😡 CONS|
|Makes the dispute process clear and easy||Individual plans have limited features|
|Saves time generating letters||Can be expensive if you only have a few|
accounts to dispute
|Easy to understand and use||Still need to understand the dispute process|
to make the best choices
What is Credit Repair?
Credit repair is a process that can be handled as a do-it-yourself project or a dedicated credit repair company – to improve a person’s credit score.
The process of credit repair primarily consists of analyzing one’s credit history and then working to remove any negative marks that might adversely impact a credit score.
A multitude of factors determines your credit score. Having a low score can be a serious issue if you are potentially looking at taking out a loan or making a purchase on credit down the line, among other things.
How Does Credit Repair Work?
The process of credit repair begins with someone taking a look at your credit history to identify what exactly is hurting your credit score. With your permission, a credit repair company will reach out to the various credit bureaus, such as TransUnion and Experian, to get a full copy of your credit history.
They will then try to remedy all or some of the negative marks by directly reaching out to the various credit reporting bureaus to file challenges against these negative marks in the hope of getting them removed.
Another tactic a credit repair company may use (if you have outstanding debt) is to send cease and desist letters to your creditors or the debt collection agency they’ve hired.
There are over two dozen different factors and events that can hurt your credit score, ranging from a bankruptcy declaration to a fraudulent account to a late loan repayment or foreclosure.
Each adverse mark damages your credit score by a certain number of points (please see the table below for a few common examples.)
|Negative Mark||Maximum Potential Damage to Your Credit Score|
|Debt Settlement||125 Points|
|Hard Inquiry||15 Points|
The Credit Repair Organizations Act (CROA) sets out what credit repair companies can and can’t do. For example, they aren’t allowed to guarantee customers that they can improve their credit score. They also can not encourage existing or prospective customers to lie to a credit bureau to improve their credit score.
The Fair Credit Reporting Act (FCRA) is another fundamental law for credit repair. Most importantly, it stipulates that if a credit bureau receives a dispute, it has up to 45 days to verify it – and if it is unable to do so, it must remove the negative mark.
However, keep in mind that such derogatory marks may reappear in your credit history and hurt your credit score if the credit bureau is later able to verify them. For example, a creditor may later provide relevant proof that they are still owed money.
It’s essential to understand that your credit score is fluid and often changes, so it’s good to keep an eye on it or at least check it before applying for a loan or taking out credit in one way or another.
How Long Does it Take to Repair Credit Issues?
It’s possible to see an improvement in your credit score in a matter of weeks if the credit repair company you elect to use successfully removes some of the negative marks fairly swiftly.
As mentioned earlier, because credit bureaus only have a maximum of 45 days to respond to a dispute, it is not uncommon to get fast results.
However, in many cases, credit repair can take a while (usually a matter of months), so it’s important to be patient and avoid getting disheartened if you don’t immediately see an improvement in your credit score.
Keep in mind that it usually takes considerably longer for an individual to improve their credit score by themselves in contrast to utilizing the help of a dedicated credit repair company.
Why is Credit Repair Especially Important For Baby Boomers?
The ultimate goal of credit repair, regardless of age or other circumstances, is to improve your credit score.
Baby Boomers can benefit from having a higher credit score. It allows them to take out a loan more easily (and potentially on better repayment terms) and generally puts their finances in a better position. Some Boomers can, therefore, benefit from a credit repair program.
As they are the wealthiest generation in the US, Boomers, in particular, should pay close attention to their personal finances and stay on top of their savings, investments, and debt.
Low-income Boomers are certainly not the only ones who may want or need to take out a loan or utilize their credit in other ways, so every Boomer should consider credit repair or, at the very least, know and understand their credit score.
What is Considered a Good Credit Score?
The major credit bureaus use FICO scores to rank individuals’ ability to repay credit. FICO scores range from 300 to 850.
A score of 800 or above is “exceptional,” while a score of 740 to 799 is considered “very good.”
A “good” FICO score is between 670 to 739, and anywhere from 580 to 669 is a fair credit score.
Finally, a FICO score of less than 579 is considered “poor.” It’s therefore difficult for anyone with such a rating to take out an unsecured loan at a reasonable interest rate.
If you refer back to the table earlier in this guide, you’ll now notice that removing just a few negative marks from your credit history can significantly impact your credit score. Improving your score will pay dividends when you’re looking to take out a loan, applying for a credit card, and much more.
How Much Does Credit Repair Cost?
As is the case with any industry, fees vary quite a bit depending on which company you use and which particular plan you choose. In most cases, you’re charged a setup fee (sometimes referred to as an “initial work fee”) and a monthly fee.
For the setup fee, you’re looking at paying anywhere from 10 bucks to about $200. While monthly fees tend to fall in the $60 to $150 region.
Things to Consider When Comparing Companies
To some, it may seem like all credit repair companies ultimately offer the same end service, so it’s merely a matter of finding the least expensive option out there for you.
However, this couldn’t be further from the truth! There are several unethical and borderline illegal companies operating in the industry, so you need to be aware.
Furthermore, there are a few essential considerations other than cost, which you should be aware of before comparing credit repair companies and individual programs.
We suggest you only consider established and reputable credit repair companies to increase the likelihood of working with an ethical and effective business.
Moreover, established credit repair companies should have plenty of reviews online to get a sense of what they’re like to work with and whether or not they’ve been able to help customers improve their credit score successfully.
The Better Business Bureau (BBB) is a fantastic, trustworthy online resource with listings for most credit repair companies so that you can read their reviews and any complaints against them as part of your due diligence.
Some companies also provide information and stats on their own performance, such as their deletion rate, average credit score increase, or particular areas of expertise. While third party and impartial reviews are preferred, this info can nevertheless help you make a decision.
How Much Does Credit Repair Cost?
Cost is unquestionably a vital consideration when comparing credit repair programs, especially as these programs can go on for several months or years, so even a relatively small difference to $10 or $20 per month can add up to a substantial amount of money over time.
It would be best if you also kept in mind that while most credit repair companies follow the pricing model mentioned earlier. Most charge an initial setup fee and a fixed monthly fee – a select few charge their customers on a more performance-related model.
For example, the Credit Assistance Network charges $50 for a confirmed deletion and $75 per public record correction, in addition to a $179 setup fee for an individual, or $279 per couple.
Some Boomers may prefer this kind of payment model, as there’s a clear incentive for the company to deliver results, and you’re not risking making several monthly payments potentially without seeing an improvement in your credit score.
However, such a payment model can eventually work out far more expensive than the more traditional model if you have many negative marks in your credit history, which can be challenged and successfully removed, so it’s certainly something to consider.
Different credit repair programs have different refund policies, but the vast majority will have a refund policy of some sort (usually anywhere from 30 to 90 days.)
It’s advisable to look for reviews online to see how easy it was for customers of a specific company to get a refund. Reviews are the best way to determine what a company’s refund policy is like in practice, not just on paper.
Not all credit repair companies serve customers in every part of the US. Some serve most of the country except for a few States, while others only serve a single State.
As there’s no point in spending your precious time researching a company that doesn’t serve customers in your state, we strongly advise you to check each firm’s coverage as early as possible in the research process.
Should I Try to Do it Myself?
It’s possible to improve your credit score by yourself, but it’s not always the best option. On the one hand, you can save yourself a bundle of cash in fees if you do it yourself, while on the other, you may not be able to improve your score as much as a dedicated credit repair company.
Also, you should note that credit repair is a time-consuming and often cumbersome process. You’ll definitely need to spend some time learning about what actually needs to be done and what steps you’ll need to take. If you don’t like taking on this kind of extra work and responsibility, it’s most likely best to go through a dedicated credit repair company.
And please check out these excellent resources to get help clearing up any credit issues you may have.
More Credit Repair Services
Credit Firm is one of the oldest credit repair companies and offers several different types of credit repair to clients. They conduct a legal audit of your credit reports. A licensed attorney reviews the accounts and approves every document that is mailed to creditors. Credit Firm also uses an exclusive FCRA compliance database to fix your credit problems permanently and in accordance with Federal law. Their services are offered for a $49 monthly fee. They also offer credit education to help you rebuild and keep your credit in good standing in the future.
Credit Assistance Network
Credit Assistance Network is not just a credit repair service. They will analyze the information on your credit reports and help dispute any discrepancies. Their services go even further, and they do not only help with charge-offs and old debt, but they can help you negotiate with current creditors to resolve debts on which you are currently behind. Their counselors can take a look at your situation and offer you personalized solutions to help you build your credit and improve your credit score. They consider your goals and what you want to achieve, such as getting a house, car, or paying for other purchases. Pricing is based on a one-time fee and then an additional fee per confirmed deletion.
Credit Saint is a credit restoration company that offers personalized services to help you identify items on your credit report that you do not agree with and offers solutions for the removal of these items. Their services also analyze your positive credit to devise a strategy to help you build better credit in the future. They can help you develop strategies for paying bills on time and opening or closing accounts to improve your credit. They provide a 90-day Money Back Guarantee and are BBB accredited. They offer three different service packages ranging from $79.99 – $119.99 per month.
Lexington Law Firm
Lexington Law Firm provides services that go beyond credit repair and dispute of inaccuracies. They do an initial consultation to determine which items are harming your credit. Next, they will challenge them and have items that the creditors cannot validate removed. Once all of the items that can be removed have been successfully eliminated from your credit report, they provide ongoing monitoring services and will address any new issues that should occur in the future. They offer service packages from Basic to PremierPlus that are from $89.85 – $129.95.