How Do Credit Repair Companies Work?

If you’re looking to fix your bad credit, you may stumble across credit repair services that can help you clean up your credit report. But, what exactly do credit repair service providers do and how do they work? Find all the important details in this blog.

What is a credit repair service?

A credit repair service is a company you hire to improve your bad credit. It works to remove inaccurate and negative information from your credit report.

A credit repair service provider represents you and communicates with credit bureaus such as Experian, Equifax, TransUnion, and other financial institutions like banks or debt collectors. 

Credit repair service providers attempt to remove harmful information impacting your credit and fix other financial disputes on your credit report. It can be a time-consuming process, but the ultimate goal is to improve your credit score.

It is important to know that credit repair service providers do not help with money management.

What to look for when selecting a credit repair service provider?

When it comes to fixing your bad credit, patience and caution are key. Keep in mind that not all credit repair services are reliable. In fact, the CFPB found that more than half of the complaints filed related to credit repair companies cited as scams or fraud.

Looking on the bright side, consumers are protected under the Credit Repair Organizations Act which regulates credit repair service providers. 

A few key points they cover are:

  • Consumers get three business days to cancel their contract without any charges.
  • Consumers cannot be charged for any services that have not been fully rendered.
  • No credit repair service provider guarantees the removal of information from your credit report.
  • No credit repair company can ask you to misidentify yourself or make false statements that prevent credit bureaus from associating the information with you.

How much does a credit repair service cost?

The fee can vary from one service provider to another, but as mentioned above, you don’t incur any fees until services are completed. You can be charged a monthly fee or per item removed from your credit report.

Furthermore, to give you a general idea, the initial fee can range between $10 and $100, while the monthly charges can range between $30 and $150.

Some companies may charge more.

Conclusion

Your credit score and credit history will follow you throughout your life, so adopt habits that will help you secure your financial future. 

A reliable credit repair service provider focuses on highlighting inaccuracies in your credit report and works consistently to raise your credit score. 

Though there’s no quick fix for bad credit, a legitimate credit repair company can help you get back on your feet and improve your credit score over time. 

Cool Credit is a credit repair service provider that can help you restore the health of your credit with time. Don’t let your low credit score define your life’s progress. 

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