Credit Repair Companies

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Credit Repair Services

In this table, we have broken down the credit repair services offered into three primary categories; basic disputing, advanced disputing, and self help credit repair. We have also noted when a companies services include additional consumer education provided to customers to help them better understand credit reporting and how to increase and maintain their credit score.

Basic Disputing designates a credit repair service that focuses solely on credit bureau disputes. These are dispute submitted directly to the credit bureaus requesting that the bureaus perform an investigation to verify the accuracy of an item recorded on a credit report. Typically, this involves contacting the original creditor who reported the item to confirm that it is accurate and being reported correctly. If the credit bureau is unable to receive confirmation within a set time period, then they are required to correct or remove the item from the credit report.

Credit bureau disputes are at the core of most credit repair services and when performed by an experienced practitioner, can yield very promising results. That said, credit bureau disputes do not work for all people in all circumstances.

Advanced Disputing services go beyond basic credit bureau disputes by working directly with the creditors reporting to the credit bureaus. These tactics have been proven to be effective in cases where a credit bureau dispute fails to remove a bad credit listing.

These advanced services include tactics such as goodwill negotiations in which a creditor is merely asked to stop reporting a negative item, direct credit disputes which similarly to credit bureau disputes request that the creditor provide proof that a negative item is being reported correctly, and debt validation in which a creditor is forced to jump through a series of hoops to prove that a debt was ever owed in the first place. Again, depending on the experience and knowledge of the company providing the service, direct creditor interventions have proven to be very effective at removing negative items from credit reports - typically more effectively and in less time than credit bureau disputes alone.

Self Help credit repair is the last category. This designates companies that provide software, e-books, kits, online portals, etc. that teach consumers how to repair their credit themselves. For people who have the time and desire to attempt to repair their credit themselves, these services can be a cost-effective alternative to paying for an outsourced service, however, it should be noted that credit repair is not necessarily easy and many people who sign up for credit repair services have already attempted to repair their credit themselves.

Credit Repair Pricing

As is the case with other service industries, there are a few different ways that credit repair companies bill customers for services. Unlike other industries, however, credit repair companies are regulated by state and federal laws that dictate when the can collect payments for services. As a general rule, credit repair companies are not allowed to accept payment for credit repair services until those services have been performed, but there are some states which provide exceptions to this for companies that are properly registered and bonded.

Because of these requirements, most major nationwide credit repair companies have adopted a monthly payment policy where the customer gets charged once per month for services rendered prior to the payment date. Depending on the company, these monthly payments may be required for a set period of time or can be terminated along with the servcies anytime at the customer's request. Many companies also charge a one time account set-up fee that is typically collected after collecting customer information, ordering credit reports, providing an initial consultation, or whatever other steps the company terms to be a part of the initial account creation process.

Other credit repair companies charge a one time fee for services which can be a red flag of a less than reputable company. Typically, fraudulent credit repair companies will charge for services upfront and then not provide the agreed upon services. Because the customer has already handed over the entire payment, often times many hundreds or even thousands of dollars, and because there is no way to guarantee that a credit repair service will be effective, it becomes difficult for these consumers to prove that they did not get the service they were promised and in turn, difficult to get their money back.

While not every company that charges for services upfront is a scam, it is an indication that you will want to do a little extra work to verify their legitimacy before signing up for services. Check their BBB report and find out if they are bonded. If the BBB has no record of the company and you can't guarantee that there is some sort of bond insuring your money, then it is probably best to find another company.

BBB Ratings for Credit Repair Companies

The BBB is a valuable tool for researching a wide variety of companies and services and to date is probably the best resource for identifying a fraudulent company. However, the BBB is far from perfect and this is most apparent when talking about credit repair companies.

Credit repair is an industry that has had more than its fair share of crooks and scoundrels. Credit repair scams have cost consumers millions so it is little wonder that there is so much anti-credit repair messaging out there. But this is not to say that all credit repair companies are scams. In fact, the top credit repair companies that have been in business since the 1990's and have combined to help millions of people legally and effectively repair their credit reports.

But instead of attempting to separate the good from the bad, some local BBBs have decided to categorize any company that provides credit repair services as untrustworthy. These BBBs currently give an F rating to all credit repair companies in their jurisdiction regardless of the number of complaints the company has received (or lack thereof), the amount of time the company has been in business, or the number of consumer the company has helped.

For this reason, an F rating may not necesarily be an accurate depiction of a company's trustworthiness so more research is required. We have liked all F ratings above to the company's BBB profiles so you perform additional research on these companies. Look at the profile to determine why the rating was assigned. If the sole reason is something like "concerns about the industry" with no other reasons, then is it likely that the company has been given an F rating simply because it is a credit repair company.

The absence of a BBB rating indicates that the company does not have a BBB profile. This could indicate that the company is either very new or small. Both are potential red flags indicating that you should perform additional research before signiung up with the company. A NR indicates that the company does not currently have a BBB rating. This could mean that the BBB profile has only recently been created, that the BBB does not have sufficient information about the company, or that the profile is in the process of being updated.