There is no quick fix for credit problems. In fact, there is very little you can pay a so-called credit repair company to do that you cannot easily do yourself for free.
That’s why companies purporting the ability to improve, repair or “fix” people’s credit are generally regarded as scams or poor value propositions. They’re either shady through-and-through, promising things they’re not legally able to provide, or they’re simply overcharging for minimal work that actually makes for the perfect DIY project. After all, your top priorities at this point in your credit career should be saving as much as possible, making sure your credit and loan accounts are in good standing and never missing a single monthly minimum payment.
If you’re interested in learning more, continue reading below for helpful tips, important warnings and a closer look at the credit improvement industry.
Best Ways to Repair Your Credit (Free / DIY)
There are three main components to legitimate credit building strategies, and we’ll break them down in detail below. But before we get to the nitty gritty of credit improvement, it’s necessary to at least touch on the importance of stopping your financial bleeding.
You might also want to reach out to an accredited credit counseling company, as they will be able to provide you with guidance throughout the credit building process at little to no cost.
First Priority: Stop the Bleeding
You can’t help your credit get better without first identifying the source of its pain. It’s like a doctor making a diagnosis prior to setting a treatment plan. Or, perhaps in more severe situations, a triage nurse prioritizing a wide-range of ailments.
The first thing you need to do is check the status of all loans and lines of credit. Forget about amounts owed for now. The real question is: Are you current on your monthly minimum payments? If not, how long will it take to make them up? And, based on how much cash you have on hand, do you foresee any future payment problems?
Answering these questions will give you a roadmap to current status. Getting current means that your issuer will start reporting you as having “Paid On Time” during the course of their normal monthly reporting to the major credit bureaus. This will ensure your credit stops slipping in the wrong direction, enabling you to focus on improvement.
Step 2: Request, Review & Dispute
The first major credit improvement strategy entails reviewing your credit reports in search of inaccurate information that might be wrongly dragging down your score. We recommend pulling all three of your major credit reports from AnnualCreditReport.com at once. This will enable you to compare how accounts are classified on each file as well as more thoroughly check for the source of your credit woes.
The main things you’re looking for are:
- Inaccurately labeled missed payments
- Incorrect amounts owed
- Duplicate accounts
- Fraudulent accounts
If you should ultimately find evidence of any such errors, you would then report them to both your credit card issuer and the credit bureau in question. You can learn more about this process in our guide on How to Fix Credit Report Errors.
Step 3: Positive Information Infusion
The only way to overcome negative information on your credit reports is to devalue it over time. Accurate records cannot be removed and may remain for a period of 7 – 10 years, depending on the infraction.
The easiest way to consistently add positive information to your credit files is to have an open credit card that is in good standing. Every month that you either make no purchases or pay your bill in full, a helpful note will be made in your report. Over time, a consistent track record of recently responsible financial behavior may be enough to begin outweighing the mistakes you’re hopefully leaving in the past.
If you have bad credit, you’ll likely need to open a secured credit card. This is far from a bad thing, though. While secured cards require a security deposit, the amount of which will serve as your credit line, they also offer effectively guaranteed approval, low fees and the comfort of knowing it is impossible to spend more than you can afford to repay.
For more information on credit building, check out our How to Improve Your Credit guide. Make sure to also check out the Federal Trade Commission’s website for some great tips and information about avoiding credit repair scams.
Credit Repair Companies & Services
Don’t get us wrong, we do not recommend ever paying for supposed credit score improvement. The most effective strategies are all free and easily accessible to the general public.
There are, however, a few individual companies that actually have pretty good reputations. That, of course, doesn’t necessarily change how much bang for the buck you get from their services. But it’s nevertheless important to give you a sense of the cream of the market’s crop, if for no other reason but to lend important context to the various flawed “Best Credit Repair Company” lists you might find on other websites.
On the other hand, the predominant – and perhaps most dangerous – side of the credit repair industry preys on the desperation of consumers who have made a few financial mistakes and are now saddled with costly bad credit. Credit “repair” services take advantage of this vulnerable consumer group, telling them what they want to hear and charging through the nose for promised results that will probably never come.
And while regulators and law enforcement have cracked down on such shady organizations in recent years – with the Federal Trade Commission and 24 state agencies levying a coordinated bust against 33 credit repair firms in 2008, for example – countless predatory credit improvement firms are still in operation today.
The following table highlights a sampling of all such organizations as well as their grades from the Better Business Bureau, their primary services and outlandish fees.
|Company||BBB Rating||Key Features||Cost||Reviews|
|“BEST” CREDIT REPAIR COMPANIES|
|Best Credit Repair Man||A+||Offers educational guides and videos.Sells educational books.||Free||Write a Review|
|CMS Credit Repair||A+||Offers credit restoration and debt settlement services.||Info Not Available Online||Write a Review|
|Consumer Credit Repair||A+||N/A – No Working Website||N/A – No Working Website||Write a Review|
|Credit Rebuilders Incorporated||A+||N/A – No Working Website||N/A – No Working Website||Write a Review|
|CreditRepair.com||A+ (BBB Accredited)||Dispute credit report errors.Credit score tracker and analysis.||$89.95 per month||Write a Review|
|Francis Credit Repair Agency||A-||Disputes and removals on both credit and ChexSystems reports.||Not available on website.||Write a Review|
|Key Credit Repair||A+ (BBB Accredited)||Disputes, removals, debt validation and settlement offers.||Free initial consultation.$99.95 per month.||Write a Review|
|My Broken Pencil||A+||Free initial consultation.Credit analysis.
Access to a certified specialist.
|Not available on website.90-Day Money Back Guarantee||Write a Review|
|My CreditGroup||A+||Credit repair.Credit coaching.
Pay for deletion.
Credit cards for bad credit.
|Not available on website.||Write a Review|
|ScoreCure||A+||1) Analyze; 2) Repair; 3) ResultDispute credit report errors.||Not available on website.||Write a Review|
|WORST CREDIT REPAIR COMPANIES|
|Credit Repair Network||F||Dispute credit report errors.||Free initial consultation.Additional pricing info not available on website.||Write a Review|
|Fresh Start Credit Repair||F||Removes inaccurate information from your credit report.||Free initial consultation.$99 setup fee + $79 per month||Write a Review|
|International Credit Repair||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|Lexington Law||D+||Dispute credit report errors.||Free credit report summary.Free initial consultation.
$99.95 one-time fee.
$79.95 - $99.95 per month thereafter.
|Write a Review|
|Life Changing Financials||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|Mark Nektalov DBA Credit Repair||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|NC Credit Repair||F||Dispute credit report errors.“Remove” negative information from credit reports.||Free credit summary and score.Additional pricing info not available on website.||Write a Review|
|New Credit Repair Corp||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|PhoneOps Management Incorporated||F||Dispute credit report errors.||$100 - $999||Write a Review|
|Pride Credit Repair||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|Strategic Credit Repair||F||N/A – No Working Website||N/A – No Working Website||Write a Review|
|CREDIT REPAIR SOFTWARE|
|Credit-Aid||No Rating||Dispute credit report errors and negotiate with lenders.||$29.95||N/A|
|Credit Detailer||No Rating||Dispute credit report errors and improve your credit standing.||$29.99 - $499.99||N/A|
|Credit Doctor||No Rating||Dispute credit reports errors, send cease-and-desist letters, help with supporting documents.||$59.99 - $99.99 per month||N/A|
|Credit Repair Magic||No Rating||Dispute credit report errors and improve your credit standing.||$97||N/A|
|Credit Umbrella||No Rating||Dispute credit report errors.||$39.95 - $299||N/A|
|AVERAGE:||C (2.09 GPA)||N/A||Free Initial Consultation$598 per year.||N/A|
How to Spot & Report a Credit Repair Scam
Credit repair scams may seem difficult to identify, especially if the emotion of your situation is tingeing the way you look at a given company. That’s why it is so important to stay calm and approach things strategically, almost in a clinical manner. There are a number of specific warning signs to watch out for, as well as various resources you can leverage for research.
|Sign It Might Be a Scam||Example|
|Violating the Credit Repair Organizations Act (CROA)||Requiring up-front payment.Not providing a written contract.
Not allowing you to cancel your contract.
Turning Credit Building into Rocket Science
|Claiming the ability to “Remove” accurate items from your credit reports or “Clean the Slate.”Touting proprietary methods and extraordinary results.
Guaranteed Ability to Raise Your Credit Score.
|Bad Reviews||Discount the best and worst reviews, and see what the bulk of a company’s customers have said|
|Organization||Report Online||Report by Phone|
|Federal Trade Commission||http://www.ftccomplaintassistant.gov/||1-877-FTC-HELP|
|Consumer Financial Protection Bureau||http://www.consumerfinance.gov/||1-855-411-2372|
|State Attorney General||http://www.naag.org/naag/attorneys-general/whos-my-ag.php||N/A|
|Social Media||Twitter & Facebook||N/A|
Credit Repair Statistics
Oftentimes, warning people so ardently about a given activity or purchase simply results in eye-rolling. That’s where hard numbers come in. The statistics below will hopefully put the above information in context and better understand the risks inherent in hiring a credit repair service.
- 0: Number of credit repair company customers who get a good deal
- $6B: Annual revenue generated by the credit repair industry
- 140,980: Number of jobs supported by the credit repair industry
- 127,894: Number of credit repair companies in operation
- 9%: The credit repair industry’s annualized growth rate in the five years to 2012
- 7%: Annualized increase in the number of credit repair companies in the five years to 2012
- > 0%: The credit repair industry is expected to grow over the five years to 2017, despite increased regulatory attention
- 26: Consumer complaints regarding credit repair filed with the CFPB from August 2014 to April 2015
- 9-9: Number of complaints where the main issue was “Customer Service” and “Fraud or Scam”, respectively.
- 4: Complaints from consumers in Texas, the most of any state (followed by NC with 3)
- 33: Credit repair organizations included in “Operation Clean Sweep” – a joint effort between the FTC and 24 state agencies