Having a bad credit score can keep you from getting the loan or credit card you need. If your credit report is long and complex with lots of past issues, you’d be surprised how many of them probably shouldn’t even be on there anymore. Things don’t get fixed automatically on your credit report even though they should. Cleaning up your credit history can go a long way towards improving your credit score and getting back on track to where you want to be financially. But when you sit down and look at your credit report, it’s hard to know where to begin and what to do about it. For this reason, many people wonder whether or not credit repair services work. This article will give you some advice about whether or not to work with a credit repair company.
Credit Repair Services are Not Free
The most important thing to realize about credit repair services is that they come with a cost. There are many companies out there who claim they can help you improve your credit score by finding and fixing things on your credit report. And they’re going to charge fees to do it. How much you’ll be charged and how long it will take varies from company to company, but here’s how CreditKarma describes it:
“Depending on the company, you might pay a one-time flat fee, or pay for each derogatory mark the company removes from each of your reports. This may start around $35 per deletion and could range to $750 or more. The company may also charge by the month, ranging from $50 to $130 or more. You might also pay setup fees or a fee for accessing your credit reports.”
Please understand that anything a legitimate credit repair service does you can do yourself and it won’t cost you a dime. The caveat, of course, is that it does cost you time, and quite a bit of it, to do it on your own. So a big part of your decision about whether or not to use a credit repair service has to do with whether or not you can afford to pay for it or are willing to roll up your sleeves and do it yourself.
What Should be Your Credit Score Goal?
The simplest answer to this question is better than what it is now, right? But it helps to know how lenders view different levels of credit scores. The most commonly used credit score that lenders and creditors look at is FICO. Your FICO credit score can generally range from 300-850. It is usually interpreted as follows:
Less than 580 = Poor
580 to 669 = Fair
670 to 739 = Good
740 to 799 = Very Good
800 and above = Exceptional
Each and every error you find and fix on credit report, every old bad-mark that can be removed if enough time has passed, will improve your score. This could be really important if you’re right on the edge being able to bump yourself into the next better category. That’s when it’s really worth putting some time and effort into seeing what you can fix yourself to get you where you want to be.
Finding Legitimate Credit Repair Services
If you decide you don’t have the time to fix your credit report yourself and can afford to pay for a service, how can you figure out which companies are legitimate and which ones aren’t? This is important because there are plenty of both out there! Here are some signs that a credit repair company may NOT be legitimate:
They want to charge you for your credit report. You are entitled to a free copy of your credit report once a year from the three major credit bureaus (Equifax, TransUnion, and Experian). Any credit repair company who wants to charge you for it shouldn’t be trusted. If part of what you want credit repair services to do for you is monitor your credit report on a monthly basis, there are plenty out there who don’t charge anything for it, or charge very little for it.
They want to charge you up-front for services. You should never have to pay a bunch of money up-front to get started with credit repair services. The most legitimate companies will only charge you based on their performance and getting results for you.
There are no real people to talk to. A credit repair service you can get started with totally online without talking to a real person could be a scam and should not be trusted.
Read customer reviews. See what other customers have to say about working with the company. But don’t trust the reviews on the company’s own website, where negative reviews may be filtered out. Go with independent sites like Yelp, Google, Trustpilot and others. Although there is still a chance that some of the good reviews are fake, the bad reviews are probably real.
Unrealistic promises. A good rule of thumb is that if it sounds too good to be true, it probably is. For example, there is probably negative information in your credit report that is accurate and should be there – any company that says it can remove that kind of information is not legitimate. Any company that guarantees a substantial increase to your credit score should be avoided because there’s no way such an outcome can be guaranteed. And if a company says it can legally create a new identify for you, run away as fast as possible!
As you can see, there is a lot to watch out for when it comes to finding a reputable credit repair company. This is because it’s also an industry known to be full of scammers. So here’s the thing: If you can do the kind of research it takes to identify legitimate credit repair services, you’ve definitely got the skills to do your own credit repairs if you have the time. It also pays to know your rights. As noted in a NerdWallet article:
“Just as laws protect you from unfair reporting and collections, there are laws to protect you from credit repair companies that mislead. The Credit Repair Organizations Act requires companies to give you a three-day right to cancel without charge, a firm total on costs and an estimate of how long it will take to get results.”
If you’re serious about wanting to improve your credit score but want help doing it, consider going with a credit counseling agency instead of credit repair services. Credit counseling is usually a free service offered by a non-profit financial education organization whose mission is to help people get better control of their finances and debts. But if you go to one of these and they say they want to charge you for services, then it’s not something you should do. Search your state’s government website to find out about any free credit and debt counseling services they may offer.
Rebuilding Credit with a Bankruptcy Car Loan
One way to begin rebuilding and restoring your credit after declaring bankruptcy or having a bankruptcy discharged is with a new line of credit and on-time payments. Day One Credit works exclusively with bankruptcy customers to match them up with a lender who specializes in bankruptcy lending to help your make the most the fresh start bankruptcy gives you. We’ve spent years building an amazing network of lenders, and when you apply through Day One, they will all be trying to get your business, and that’s the kind of competition that helps ensure you’ll find the loan that fits your situation.
While we find we can help most people, not everyone is eligible, so be sure to visit the Day One home page and scroll down to “Day One Eligibility Guidelines” to see who we can help and who we can’t. Whether you’ve filed a Chapter 7 bankruptcy, a Chapter 13 bankruptcy, or have had one recently discharged, Day One is ready to help you find the loan and the car you need. In fact, when you fill out our fast online application, you can get an answer back in minutes!
There are many potential benefits to be gained by working with Day One to find a bankruptcy car loan. Besides helping you get your credit back on track, you may be able use it to get out from under a bad car loan. If you owe more on your vehicle than it’s worth, we may be able to help you get out of your upside-down or underwater car loan and get a better deal. We’ll also help you find a great car – something used to get the most bang for your buck, but as recent a model as possible with lower miles and in great shape so you’ll spend less in the long run on repairs compared to an older used car. At the same time, you’re avoiding the huge hit in depreciation you take with a brand-new car. Trust us, we’ve got this figured out through years of experience!
At Day One Credit we are experts at finding the best possible bankruptcy car loans in order to help our customers purchase high-quality used cars. We are not lawyers, we do not give legal advice, and nothing we say should be taken as legal advice. Your first step in anything related to bankruptcy should always be seeking the advice and counsel of a qualified bankruptcy attorney.