Loans, credit cards, and other forms of financing are all useful tools to help you get extra money in a pinch–as long as you can pay them off as per the terms of the financing agreements.
Credit bureaus create scores to determine your trustworthiness as a borrower. If you’ve ever looked into how to get a small loan with bad credit, you know that it’s difficult even when you’re not asking for a lot of money. Thankfully, you can work with a credit repair company to bring your score back up to a level where your loan applications will be accepted.
In this post, we’ll explore credit repair programs and what you can expect from them, so that you can make an informed decision about whether these programs are right for you.
What Do Credit Repair Companies Do?
Credit repair companies attempt to get unverifiable or inaccurate information removed from your credit report in order to raise your score. This is legal in every state except Georgia. Some companies, like The Phenix Group, will also get attorneys involved as needed.
If you want to know how to start building credit again, credit repair companies may be able to help with this, as well. Some offer credit education for consumers to guide them on how to make better financial decisions and develop action plans to get back on their feet.
What Won’t Credit Repair Companies Do?
There are some limitations to what credit repair companies can do. They cannot get accurate negative information removed from your credit report. They also can’t advise you to change your identity to hide your old information from credit bureaus. This can get them–and you–into serious legal trouble.
How Credit Repair Companies Work
To start, credit repair companies will need copies of your credit reports from the three major bureaus (Equifax, TransUnion, and Experian). They’ll review those reports for items such as liens, charge-offs, bankruptcies, and collections. They’ll then write letters to verify the information, dispute negative items, and ask debt collectors to stop contacting you. This may involve the use of attorneys.
Next, they’ll provide recommendations on what to do next. That may include opening new accounts to create more positive marks on your report, as long as you’re able to pay the debts and keep the balances current.
How Much Do Credit Repair Companies Charge?
Prices for credit repair services vary depending on the company. Some charge between $50 and $130 monthly, whereas others charge anywhere between $35 and $750 per item deleted from your record. They may also charge fees for setup, education, and analysis. To save you money, The Phenix Group offers these extras for free.
Final Thoughts
Credit repair programs can’t fix everyone’s credit problems, but if your financial problems are due to inaccurate, unverifiable, or outdated information, they may be able to help. In this case, the next step is finding the right company to work with.
The Phenix Group creates individualized action plans for our clients to help boost their credit health. Reach out today for your free consultation!