How Credit Repair Companies Work

Many credit repair companies offer to fix your credit report errors fast. When you take a close look at their methods, though, you’ll notice that you can do the exact same things on your own for free. Some companies even make you do most of the leg work, which means you don’t really benefit from anything. Here’s what you need to know about how they work so that you can determine whether it’s a service worth paying for.

Obtain Information from You about Errors

Credit repair companies begin the process of disputing errors on your behalf by collecting the necessary information from you. The company you choose will send you copies of your credit reports from all major credit report bureaus and ask you to circle the records that are erroneous. You’ll most likely get a phone interview with a representative to explain why the record is inaccurate or incomplete.

Send Dispute Letters on Your Behalf

The company will then customize a letter template and send the appropriate bureaus credit dispute letters. In the letter, the company will ask for an investigation and for the record to be removed or corrected. It will also submit any documentation that you provided.

Set up Automated Payments

Some credit repair companies also set up automated payments with creditors so that you can work towards paying off your remaining debts. They may or may not try to settle with creditors. That depends on the services they offer.

These are all things that you could be doing yourself, and it may not be worth the expense to pay someone else to do them. The money you save could be put towards paying off your debts.