Using a Credit Repair Company vs. DIY Credit Repair

Credit repair companies do not necessarily have access to special tools that consumers do not. So, with this being said, you may ask why would credit repair be worth the associated cost? In most cases, using a DIY form of credit repair may be the better bet. More often than not, the simplest way to build credit in the long term is by simply applying for a secured credit card and making use of credit builder loans. These additions to your credit portfolio will do quite a bit to help rebuild credit in the long term.

Benefits of Using a Credit Repair Company

The main benefit associated with using a company is that there are many laws and regulations regarding credit repair and tactics to get items removed from bureau reporting, that the average consumer will not realistically have the time to properly research and create an executable plan. Another benefit of using a company is that a good credit repair company will know the ins and outs of what is going in the credit repair industry at the present time. Their experience will be the most valuable asset. Most consumers won’t have that experience at their fingertips. Other than that, if you are a DIY type of individual, you may consider doing it yourself and saving all associated fees with using a credit repair company.

Credit Repair Regulations

Consumers should also understand that credit repair companies are highly regulated and if you feel money was taken without any service being provided they are in direct violation of the CROA (Credit Repair Organizations Act) law. It is illegal to promise a service and not render it, so if you feel you’ve been charged and no service has been provided you should reach out to the FTC and files complaints with the BBB. The CROA aims to protect consumers so it’s best to always know your rights when working with an agency.

Moreover, credit repair companies cannot provide you with a guaranteed credit score improvement. For the most part, credit repair is hit or miss. Sometimes, the services rendered are successful, but sometimes they are not.

If You Choose to Go with a Credit Repair Company Consider the Following:

*Try to avoid front loaded pricing and fees. The price point you pay should really be dependent upon the work the credit repair company performs!

* The one scenario in which credit repair can have an outsized impact on your personal finances and be worth the associated costs are if you are home shopping and plan on acquiring a mortgage. From experience, this is really one of the cases in which a rapid credit repair service may very well be worth the associated fees, since if successful, it will typically save you thousands on the interest rate of your mortgage.

* If you don’t plan on utilizing your credit in the short term, credit repair may not be the best way to spend your money right now.