Getting a new credit card, a mortgage, or even renting an apartment without a good credit score is challenging. If you’re struggling to rebuild credit, professional credit repair services can help.

Credit repair companies offer a variety of services, but usually, they focus on disputing errors on your credit report. While you can implement many of these strategies yourself, credit repair companies can provide you with extra help if you need it.

What Are Credit Repair Services?

Credit repair services are a collection of strategies that can help improve your credit score. Companies offering these services educate you about credit and work as your advocate. They help you improve your credit score by negotiating with credit bureaus and lenders to resolve issues and remove negative marks.

If there are no errors on your credit report, credit reporting companies can help you implement a credit repair plan to lower your overall debt and pay your bills on time. Over time, these strategies can raise your credit score, making it easier for you to get credit at favorable interest rates.

Types of Credit Repair Services

Every credit repair company offers a different set of services, but some common things they offer include:

  • Reviewing credit reports from all three major credit bureaus- Experian, Equifax, and TransUnion to identify inaccuracies.
  • Sending credit dispute letters to remove outdated and incorrect information.
  • Creating a credit improvement plan to help you establish a budget, pay down debt, and lower your credit utilization ratio.
  • Educating you on how to manage credit.
  • Credit monitoring services to detect unauthorized accounts, identity theft, and suspicious activities.

Benefits of Credit Repair Services

While you can fix your credit yourself, there are a number of advantages of hiring a professional.

  • It helps you save time and effort by handling time-consuming tasks like identifying inaccuracies and sending out credit repair letters.
  • You’ll be working with experienced professionals who can spot errors on your credit report that you may have missed. 
  • Credit repair companies can also help you maintain a good credit score by providing you with the personal finance education you need. 
  • They can also provide monitoring services so you can quickly respond to events that may lower your credit score, such as identity theft.

How Credit Repair Services Work

Understanding how credit repair companies work will make it easier for you to determine if their services are right for your financial situation. Most credit repair companies offer a free consultation to review a copy of your credit reports and see if their services will be a good fit for you. If you decide to move forward, you’ll have to sign a written contract that provides them written consent and a limited power of attorney to act on your behalf.

The company will then review your credit reports to find inaccurate information that may be lowering your credit score. They’ll dispute these items with the credit bureaus and creditors. Credit reporting agencies are required to investigate disputes within 30 days of receiving notice, and if they confirm them as inaccurate information, they’ll remove the item from your files.

Most credit repair companies will also provide regular progress reports to update you about the status of the disputed items. They may also help you create a credit improvement plan so you can implement other strategies, such as on-time payments and debt repayment, to improve your credit score.

When You Should Use Credit Repair Services

Credit repair services include a set of strategies that you can implement yourself to improve your credit score. That being said, we recommend that you use credit repair services under the following circumstances:

  • There are a lot of negative items on your credit report.
  • You have a complex credit history requiring a lot of interventions to correct errors or address specific issues.
  • You don’t want to put in the time and effort it takes to dispute items by writing letters and making several phone calls.
  • You don’t mind spending money for these services, if it means someone else can handle it for you.

Do Credit Repair Services Work?

Legitimate credit repair services can help you remove outdated and inaccurate information from your credit report. However, if the negative items in your files are accurate and verifiable, they can’t be removed. The only way to improve your credit score in that situation is by attending nonprofit credit counseling, improving your repayment history, reducing debt, and using credit responsibly.

“Credit repair services and organizations can also help you recover your good credit if you were the victim of identity theft or fraud,” says Brad Reichert, debt expert and founder and managing director of Reichert Asset Management LLC.

If you haven’t already signed up for a service that will help protect you from or recover from ID theft, credit repair services can help you dispute accounts that were opened fraudulently or were the result of identity theft,” Reichert explains.

How Much Do Credit Repair Services Cost?

Credit repair services usually come in tiered packages, with the higher tiers offering additional services like credit monitoring and identity theft protection. The amount you’ll pay will depend on the package you sign up for, but credit repair companies can’t charge you until they deliver results.

Of the ten companies we reviewed for this article, the average upfront fee you’ll pay is usually between $99 and $149. The monthly fee ranges from $19 to $199.

How Long Do Credit Repair Services Take?

Credit repair is a long process, and it may take a few weeks or even a couple months before you see any results. After the initial setup and identification of errors, the company you work with will send out validation letters to creditors to request they validate a debt. They’ll also send credit dispute letters to credit bureaus to dispute any wrong information they find. 

Credit bureaus must investigate and render an internal decision on a debt’s validity, within 30 days of receiving the letter. Once the investigation is complete, they’ll notify you of the results within five business days, usually by mail or Email. Depending on what other strategies the company is using, the entire process may last three to six months.

What To Know Before Selecting a Credit Repair Service

It’s important to thoroughly vet a company and check their review on Better Business Bureau (BBB) before you sign a contract for their services. Be wary of red flags, such as guaranteed removal of late payments, and check the consumer advisory from the Consumer Financial Protection Bureau (CFPB) to avoid credit repair scams.

Not all companies offer their services in all states. Search for “credit repair services near me” to find companies that offer services in your area. Check our list of the three best credit repair companies in 2023 for our recommendations.

Here are a few additional things to keep in mind when selecting a credit repair service:

  • The credit repair process is long, and it may take three to six months to see any improvement in your credit score.
  • Credit repair companies can only remove inaccurate negative information.
  • You’ll most likely have to pay setup or enrollment fees in addition to a monthly fee.
  • Many companies offer unlimited disputes, which can be useful for those with a lot of negative items.
  • There may be a 90-day money-back guarantee in case you’re not satisfied with the services, so it is always a good idea to ask.
  • You may have to provide documentation and other proof to support disputes.
  • You have the right to cancel your contract with a Credit Repair Service provider, without penalty, within three business days in accordance with the cooling-off rule of the Credit Repair Organizations Act (CROA).

The Bottom Line on Credit Repair Services

If you have a bad credit score, credit repair services can help you improve it by identifying and disputing incorrect and outdated information on your credit report. However, anything they do, you can do, yourself, with the help of a credit counselor.

Credit repair businesses often charge a hefty upfront fee and a monthly fee, but in return, they help you repair your credit through methods that can often be time-consuming and labor-intensive when you do them yourself.