Best Credit Repair Companies: Use with Caution
You have a lot of important numbers in your life. There's your age, your weight, the number of years you were in school and the password to access your online banking accounts. But you also have a three digit number that impacts many different areas of your life. It's called your credit score.
You build a credit score, either a good one or a bad one, over time. The short version of credit scores explained is that credit reporting agencies keep an eye on how much debt you have and how quickly, or slowly, you pay it back. Timely payments on everything from the power bill to a credit card help you build a higher credit score. Every late or missed payment brings your credit score down and leaves you with a lower number.
If you decide that a credit card is the right choice for you, you need to research ALL lenders out there. Consider these lenders and put in your information to see if they would send you an offer:
Credit Repair Companies with Good Reputations
While there are some credit repair companies involved in fraud and scams, others are legitimately in the business of working with consumers to fix credit reporting mistakes and get them on a path to a better credit score. These are some of the best credit repair companies reviewed by clients.
Ovation Credit Services
Ovation Credit Services is one arm of LendingTree.com. Ovation charges customers by the month with plans beginning at $79.00. Each client is assigned to a case manager who reviews credit reporting information and helps to identify problems and communicates with creditors. Ovation Credit Services reports that it has corrected 120,000 credit reports as one of the best credit repair companies.
Sky Blue Credit
Sky Blue Credit prides itself on finding items that need to be disputed and working to dispute them quickly. Sky Blue Credit disputes 15 items every 35 days. The fee is $79.00 a month for one person and $119.00 a month for a couple. When necessary, Sky Blue Credit also provides additional services like cease and desist letters because it is one of the best credit repair companies.
The Credit People
The Credit People advertise that while they work to delete mistakes from credit reports, they are also very focused on doing the right things to raise the actual credit score. An online tool allows the customer to watch the work that is in progress. There is a $19.00 fee to signup for The Credit People and the monthly fee is $79.00 and it can be canceled at any time. There is also a flat-rate tier with a charge of $419.00 for six months of credit repair services.
The Credit Pros
The Credit Pros are in the financial technology sector and through their software, they help clients identify problems with the credit reports, understand money mistakes they made in the past, and offer education to prevent credit problems in the future. The Credit Pros offer a range of different packages for their services that begin with $19.00 a month for credit monitoring and rise to $149.00 a month for all of their offerings.
Credit Saint Credit Restoration
Credit Saint Credit Restoration is one of the best credit repair companies. It places an emphasis on not only working to repair damaged credit but teaching clients how to build a positive credit history for the future. Customers at Credit Saint pay an initial fee for work to begin and can choose from three tiers of service known as Credit Polish, Credit Remodel or Clean Slate. Monthly fees for the packages range from $79.99 to $119.99. Credit Saint also offers a 90-day money-back guarantee.
AMB Credit Consultants
AMB Credit Consultants believes that the company's most important role is as an advocate for consumers. AMB Credit Consultants assists with errors and advocates for credit report inaccuracies to be fixed. But a large focus is on educating clients to make decisions that are best for their financial health.
How Do Credit Repair Companies Help Raise Credit Scores?
Consumers hire the best credit repair companies to thoroughly examine their credit reports and and then work to eliminate mistakes, negotiate with lenders and recommend ways to build better credit scores.
Some credit repair companies charge a one-time fee while others charge for each item they are able to get updated or removed from the credit report.
Working through problem reports is something any consumer can do. But some people facing a list of issues will hire the best credit repair companies to help them get through it all as efficiently as possible.
If you are considering hiring a credit repair agency, the FTC has some words of warning. Investigators say there are plenty of scammers out there advertising that they can fix bad credit reports or create new credit identities, and that is just not the case.
If you are considering hiring an agency look for one of the best credit repair companies. The FTC says these are some of the red flags to watch for that indicate a company is fraudulent.
The credit repair company recommends you begin using a federal Employee Identification Number, EIN, to apply for new credit. An EIN is a legitimate number that businesses use when doing business with the IRS and the Social Security Administration. An EIN is not a substitute for or a brand new version of a consumer's Social Security Number
If the credit repair company offers to sell you a brand new Social Security number as a tool for building a new credit report, that Social Security number they are offering has been stolen, and they are involved in identity theft.
If the credit repair company tells you not to contact the credit reporting agencies yourself, something fraudulent is going on.
If the credit repair company advises you to dispute information on your credit report even though you know its true, that is a fraud.
If the credit repair company recommends putting false information down on a loan or credit application, that is also fraud.
Using fraudulent identification numbers and lying on applications and disputes are all federal crimes that could result in fines, prison time or both.
Your Rights When Repairing Your Credit
Consumers are protected by the Credit Repair Organizations Act, CROA. This law makes it illegal for credit repair companies to lie about what they can deliver for you in terms of credit repair. These companies must provide you with a written contract and advise you how long it will take to get results. They have to disclose the total cost you will pay and they cannot charge you before they have performed any services.
CROA is enforced by the FTC. If the credit repair company falls short of delivering on its contract, the consumer can sue the company in federal court, seek punitive damages or join a class-action lawsuit against the company.
Credit Repair and Credit Counseling are Two Different Things
While credit repair companies charge a fee to help consumers with their credit reports and scores, credit counselors help by crafting plans for financial health. The National Foundation for Credit Counseling, NFCC, is a nonprofit that was founded in 1951. A nationwide network of members help consumers put themselves on a path for financial well-being.
Clients are assigned credit counselors who review the current financial picture and ask about financial challenges and goals. At the end of a session consumers have created a budget and an action plan that makes financial sense for them and over time improves the credit score.
Credit Repair Takes Time
Your credit score didn't go from good to bad in one day and it's not going to head in the other direction that quickly either. Whether you choose to work on any problems in your report yourself and create a new financial picture or you enlist the assistance of a credit counselor or you hire one of the best credit repair companies, there are two things that will improve your credit score: a debt management plan and time.
Why Do I Need a Good Credit Score?
Your credit score is a snapshot that reflects how you have handled credit in the past. A higher credit score can help you loans at better interest rates because lenders will assume you are a better credit risk than someone with a poor credit score. When it's time to secure a loan for a car or a mortgage for a home, lenders will prefer to extend credit to someone with a higher score. Utility companies may make determinations about turning on service based on your credit score. And sometimes prospective employers look to your credit score as a measurement of how well you manage money and conduct your personal life.
A credit score is simply a mathematical calculation based on available data. Your credit score doesn't know that you were laid off and got behind on your bills until you found a new job. Your credit score doesn't know that you took family leave to care for an ailing relative and didn't receive a paycheck for 12 weeks. But it gives lenders a starting point to investigate your creditworthiness.
Personal wealth has nothing to do with your credit score. Reporting agencies do not factor in things like how much equity you have in your home or how much money you have saved for retirement.
Who Is Keeping Track of My Credit Score?
There are two commonly used credit score resources, FICO and VantageScore.
- FICO
FICO used to be called the Fairr Isaac Corporation until it adopted its acronym in 2009. FICO software uses payment history, types of credit used, how much the borrower owes as well as how many new credit accounts have been opened. More banks and lenders use a FICO score than any other score when making borrowing decisions.
- VantageScore
VantageScore was created by three credit reporting agencies - Equifax, Experian and TransUnion. It uses a slightly different way to compute a credit score through payment history, available credit, recent credit and the size of the balances owed.
What is a Good Credit Score?
FICO scores range from 300 to 850. A score of 650 or more is considered to be a good score. A score of 800 or more is considered to be excellent.
VantageScore has adopted a numerical scoring system that is close to FICO scores to help reduce consumer confusion. VantageScores range from 300 to 850 also. 660 or higher is considered a good score and 780 or above is an excellent score. VantageScore will also tally a score for someone who is relatively new to the world of lending.
How Do I Found Out What My Credit Scores Are?
Federal law mandates that you are able to receive one copy of your credit report free each year from Experian, Equifax and TransUnion. Each agency's website has instructions for viewing your credit report. There are also options available to subscribe for credit monitoring services that allow you to check more frequently and even receive alerts if there is suspicious activity within your report.
VantageScore has a page of resources on its website that offer free acess to its credit score. Some banks also give you access to your credit score if you are one of their credit card holders. AnnualCreditReport.com is a truly free credit report.
You should regularly review your credit report to know your score and catch mistakes.
My Credit Score is Low, How Can I Fix it?
So you've taken a look at your credit score and found out it is lower than you'd like it to be. You can usually identify the problems behind the lower score, whether they are big balances, missed payments, maxed out credit or too many new requests. The first step is to eliminate the behaviors that led to the low score by managing debt in a timely and responsible way. Over time your credit score will rise but it can be a slow process. That is why some people turn to the best credit repair companies to help them raise their scores as quickly as possible.
How Likely Is It There are Mistakes on My Credit Report?
According to the Federal Trade Commission, FTC, 1 in 5 credit reports contain a mistake. Common things to look for include mistakes in personal information like name and address. Sometimes information gets confused on a report because someone else has a similar name. In a situation where fathers and sons are Juniors and Seniors information can be cross-recorded because of the similarity in names.
Other common errors including the status of accounts that may have been previously closed showing as open and impacting the amount of total credit available. Balances on accounts and loans may not be up to date. And if there are accounts open you don't know anything about, there is a possibility that identity theft is involved.
The FTC recommends regularly reviewing your credit reports for mistakes. You are within your rights to contact both the credit reporting agency and the lender to get any errors corrected. You can also hire a company to do that work for you.
The Creditry Store Helps You Stay on Track
Conclusion
There are credit repair companies you can hire and the best credit repair companies will scour your report looking for mistakes and advocate on your behalf to have the information changed. The best credit repair companies can also evaluate your past financial behaviors and suggest ways to build a higher credit score. Beware of agencies that suggest fraudulent practices like using someone else's Social Security number to secure credit. The best credit repair companies help consumers evaluate how they have managed credit in the past and assist them with best practices for going forward.
Repairing your credit doesn't have to cost you any money. You are entitled to free copies of your credit report and you can examine the data yourself looking for errors and omissions. You can contact credit reporting agencies and lenders and ask them to clarify information that is in doubt. And there are free credit counseling companies out there that will help you analyze how you have been using credit and make budgeting suggestions.
Your credit score impacts your ability to get loans at the best terms possible. A prospective employer may use the credit report as a tool for making a decision to hire you or not. A potential landlord may use your credit score to decide to rent to you or not. Know your own number and work to get it as high as possible.