How Much Does Credit Repair Cost?
Credit repair is the process through which one attempts to better his credit score. Credit scores indeed spell the difference between financial success and failure. If you have bad credit, chances of securing a loan or credit are not that great. It is known that creditors do not just obtain your credit record to verify your worthiness. Over the years, these records become insurance companies’ basis of approving or denying premiums and loans. Although there are loans for bad credits, there are some limitations that would not enable one to enjoy the benefits that people with excellent credit scores get. That is the reason that if your credit score is low or inaccurate, asking for professional help for credit repair is the next best thing to do.
How much does it cost?
- Repairing credit scores is possible with the help of credit repair companies. The cost of getting help from one varies considerably. According to Experian.com, credit repair companies can charge anywhere from hundreds to thousands of dollars.
- Most credit repair companies charge monthly. Subscriptions to these companies generally run between $49 and $79 per month, but that can vary depending on the company. This is according to Mint.com. Considering the number of months consumers need to undergo, which could be somewhere between 8 and 18 months, the average price of $64 per month for about 13 months. That would specifically be $832. These are reflected by the prices of most credit repair companies.
- Creditrepair.com, for example, charges $89.95 per month to their clients, excluding the cost for obtaining the credit report. Funnewjersey.com, another credit repair company, charges $69.00 per month for the services they offer.
- There are also other credit repair companies that offer one full service for a particular price. CreditUs, for instance, follows the non-traditional way of charging their clients. The company offers a one full service at a fixed price, broken down over 5 monthly installments. Specifically, the client needs to pay $99 for the initial work fee after the account is set up for him. Four monthly installments of $99 will be paid after that. Excluding the separate charge for the credit reports update, the whole price will mark at $495. The same method is used by GL Credit Repair which charges $180 for the one time set up fee. However, the monthly payment of $45.00 is not only limited to a number of installments – you need to pay every month as long as you feel that you still need the companies’ help.
- If you just do your research, you will be able to know that there are credit repair companies or organizations that offer lower prices than the mentioned monthly fees. However, be wary about choosing one since they have the tendency of delivering substandard results.
What is going to be included?
- The processes of obtaining help from credit repair companies varies from one company to another. This means that the features and premiums you may get will differ considerably. However, all of these are geared towards your benefit of fixing, maintaining and building your credit.
- Regardless of the process, clients who sign up for these credit repair companies are able to receive alerts regarding their credit report so that they can keep a close eye on things. If there is any suspicious activity, they will be notified of it.
- Most reputable credit repair companies will include a personal online dashboard that allows clients to view their accounts and credit repair progress 24 hours a day. Also, dedicated member advisers are there to help clients navigate through the credit repair process. In addition, a monthly online credit score analysis, identity theft insurance and monthly updated credit reports are given to clients. There are also mobile apps and customizable SMS alerts that allow clients to monitor and receive updates of their credit scores wherever they go.
- A few credit repair companies promise warranties that favor their clients. A particular company, for example, ensures a partial or complete refund of money whenever their clients are dissatisfied with the services offered or if the company fails to remove or improve at least seven negative items from the credit reports of the client. But again, not all credit companies are offering these favorable assurances.
What are the extra costs?
- Credit reports. As mentioned, the costs for credit reports are not included. By working with purchased credit reports, by law, the three Credit Reporting Agencies will be required to update your credit reports 30 days after the investigation of your credit score began. They will charge you an additional $48 for the reports. Creditrepair.com, for instance, requires a one-time charge of $12.99 in order to obtain credit reports. The prices vary from one company to another. This is the reason that you need to check this upfront.
Factors that influence the price:
- Credit repair program’s length. If your credit score is really poor, then the program may take nine (9) months or more. In contrary, if your score is just in the average and only needs minor credit report disputes, a three-month program may be enough already. Since the amount you will pay for the credit repair is predicated upon the length of the program, knowing the strength of your credit score is quite necessary.
- Credit repair company. Again, the costs vary from one credit repair company to another. Some mark at the average price of $49 and $79 per month while others go beyond or below this. Others also offer a one-time payment program with monthly installments that offer all-inclusive services.
Tips to know:
- Be careful of scams. Credit repair is susceptible to scams that will just rob you of your money. In fact, there are reported companies which, after getting upfront fees from their clients, suddenly disappeared. Thus, it is very important for you to do your research first. Do not just go for a company that offers promising results at an affordable price. As a client, you need to be very keen in choosing the right credit repair company.
- Be familiar with the Credit Repair Organizations Act. This federal law which became effective on April 1, 1997, was created in response to the number of consumers who had suffered from a credit repair scam. By familiarizing yourself about this law, you will know the do’s and don’ts of choosing the right credit repair company. Always keep in mind that credit repair services must follow specific guidelines from the Credit Repair Organizations Act. If not, then run away from that company.
- As suggested by BankRate.com, run away from a company that asks you to pay for credit repair before services are provided, advises you to dispute all negative information in your credit report, offers to help you get a new credit identity, promises too-good-to-be-true claims.
- Do your homework. Before you sign up for a company, contact the Better Business Bureau to see if the firm has had any or existing consumer complaints.
Questions to ask the credit repair company?
- How long are you operating already? Do you have any previous clients who you were able to help that I can talk to?
- How long will it take for me to have my credit score repaired? Should I wait months or years to achieve the results I want?
- What are the specific processes I need to go through with you in order to have my credit score rise up beyond average?
How can I save money?
- The key to getting the value of your money is to understand your own credit report. Always remember that you will not be robbed of your money if you know the ropes as well. Find out what makes up your credit report and identify if it is in average or just mediocre enough. As we all know, the specific score determines the length of the program, which in return determines the costs for the credit repair.