How Do Credit Repair Companies Help?


Updated on : July 6th, 2021
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If you’re looking to repair your credit score, you may have considered hiring a credit repair company. However, with so much of the work being done behind the scenes, you may be curious as to how a credit repair agency can actually help.
Moreover, with so many credit repair scams out there, it’s hard to know which ones to trust. In this article, we’ll break down the process that legitimate credit repair companies use to fix bad credit. We’ll also provide answers to common questions that you may have. At the end, we’ll suggest a few companies to look into if you decide that this is for you.
What Is A Credit Repair Company?
A credit repair company is an organization that helps customers improve their credit scores. Typically, they do this by helping you understand your credit report, and then disputing incorrect information with credit bureaus. The end goal is fewer bad marks on your credit report and a better credit score.
Credit repair companies are for-profit. They usually have a very hands-on, personalized approach to fixing your credit score. They handle all interactions with credit bureaus on your behalf.
In contrast, credit consulting agencies are usually nonprofit. They offer advice on how to improve your credit score, but won’t take any actions on your behalf. The United States Department of Justice has a useful list of all approved credit counseling agencies.
How Do Credit Repair Companies Work?
To repair your score, legitimate credit repair companies will usually follow a three-step process:
- Free initial consultation
- Dispute credit reporting errors on your behalf
- Recommendations on how to improve your score going forward
Here’s what you can expect from each of these steps.
Free Consultation
All reputable credit repair companies will offer a free initial consultation. During this step, they will request a free copy of your credit report and go over it with you, noting down the following:
- Inaccurate or outdated personal information
- Accounts that don’t belong to you
- Incorrectly reported late payments
- Incorrect public records
- Inquiries that shouldn’t be there
Any of these common credit reporting errors can lower your score. After identifying them, the company will make a plan to dispute each one for you.
Dispute Credit Reporting Errors
In this step, the company will carry out their plan to correct the errors on your credit report. They do this by helping you gather evidence to support the dispute, and then writing dispute letters to the credit bureaus.
From there, the company will handle everything for you. This is great if you’re unsure about how to handle disputing a credit reporting error.
At the same time, it can be hard to know what the company is doing behind the scenes. To help with this, some companies offer credit monitoring services so you can see how your score increases over time with each dispute. In addition, many companies will email or call to update you on status.
Recommendations Going Forward
Once errors are disputed, most of the work is done. However, a good company will also provide recommendations to improve your score going forward.
This may include identifying which accounts to prioritize paying off first. Other companies may direct you to other credit counseling services where you can seek more advice.
What Credit Repair Companies Won’t Do
The main purpose of a credit repair company is to dispute credit reporting errors. It’s also important to know what credit repair companies typically won’t do for you:
- Remove bad marks on your report if they are accurate. They should only dispute inaccurate information.
- Help you pay off your debts. They can suggest ways to help pay off your debts, but no reputable company will directly offer loans to help you do this.
- Help you budget or manage your finances. Instead, a financial advisor or credit counseling service can help you with this.
Do Credit Repair Companies Actually Work?
Yes, legitimate credit repair companies can help you dispute errors on your report and improve your overall credit score. This process can be complicated if you’re unsure how to approach it. Also, it can be reassuring to have a professional do all of this work for you.
However, with so many scams in the credit repair industry, it’s reasonable to be wary of these services. In addition, you may be worried about spending extra money on a credit repair company.
Only hire legitimate credit repair companies with a proven track record of helping customers fix their scores.
How Long Does Credit Repair Take?
Most consumers will hire a credit repair company over a span of three to six months to allow enough time for credit challenges. However, the time it takes to dispute reporting errors can vary based on many factors. For example, it depends on how many errors there are, as well as the nature of those errors.
For example, a dispute involving a late payment that is over seven years old may not take too long to correct. However, an account that you don’t recall opening can take longer for credit bureaus to investigate.
Under the Fair Credit Reporting Act, credit bureaus must report the results of a credit dispute within 30 days. However, a bureau could find a claim to be “frivolous.” In this case, they can choose not to investigate it, as long as they get back to you within five days.
How Much Does Credit Repair Cost?
In general, credit repair companies price their services in three different ways:
- Monthly subscription
- Pay per successful dispute
- One-time upfront fee
For monthly subscription services, these typically range anywhere from around $70 to $150 per month. One example of this is Credit Saint, which offers monthly plans from $79.99 to $119.99 per month.
Some companies charge per successful dispute. For example, Credit Assistance Network charges $50 for each successful removal of an item.
Other companies request a one-time fee. Credit Monkey is one example, with plans ranging from $99 up to $499 depending on what services you need.
Many companies will also charge an initial setup fee, which can cost anywhere from $50 up to $200. While costs can certainly add up, a credit repair company can save you lots of time and money in the long run.
Is It Worth Paying Someone To Fix Your Credit?
Given all these costs, you may be unsure about spending money on a credit repair company. This is especially true if you are already in debt. Every person’s financial situation will vary, but here are some reasons why you might still want to invest in credit repair:
- They know what to look for. Legitimate credit repair companies have seen thousands of credit reports in the past. They can help you figure out exactly what is causing your score to go down.
- They know how to write dispute letters. Credit repair companies are experienced in communicating with credit bureaus. Through their experience writing dispute letters, they could potentially help you dispute a claim that you might not be able to yourself.
- You’ll save time. Figuring out the credit disputing process by yourself involves lots of time. You’ll need to read your report, gather evidence, write letters, mail them out, and keep track of responses. Credit repair companies do most of the work for you, with little effort on your part.
- You’ll start to get serious about improving your credit. If you have poor credit, it can be hard knowing where to start. You may be putting off improving your credit score as a result. Hiring a credit repair company can force you to get started with this process and help you see the benefits of having better credit.
Be sure to take advantage of the free consultation that most credit repair agencies offer. This is a free walkthrough of your credit report and can help you determine whether you want to continue with paid services.
Can You Fix Your Credit By Yourself?
Yes, you can fix your credit by yourself. Anything a credit repair agency can do, you can also do yourself.
However, the process of disputing errors with a credit bureau can be difficult if you don’t know where to start. In addition, you may miss potential areas of dispute in your credit report that a repair agency can easily identify.
Choosing A Professional Credit Repair Service
You should only ever hire a legitimate credit repair service. Professional credit repair services will almost always offer free consultations. Another good sign is that they are accredited by the Better Business Bureau.
Red Flags
Avoid any credit repair agency that raises these red flags:
- They violate the Credit Repair Organizations Act (CROA). This act makes it illegal for credit repair companies to demand advance payments. It also requires that credit repair contracts and guarantees be made in writing.
- They promise a certain score increase. It’s a red flag if a company claims they can raise your score by a specified amount. According to CROA, a guarantee like this must be made in writing.
- They promise to remove all bad information, even if accurate. Credit repair agencies should only be responsible for disputing negative information that is incorrect.
- They are not transparent about pricing or services. If a company doesn’t clearly list out their services and prices on their website or during your initial consultation, avoid them.
Conclusion and Next Steps
A credit repair company can help you repair poor credit by identifying and disputing incorrect information on your behalf. While upfront costs can be significant, by improving your credit score, they can help you save thousands of dollars in the long run.
If you need credit repair, we recommend starting off by contacting one of these three agencies and signing up for a free consultation. You can decide later whether you want to hire them for their services.
Credit Saint

Credit Saint is one of the most popular credit repair services. If you contact them, an expert will walk you through the entire process. Credit Saint is particularly suited for those with more credit problems that may require a longer time to fix.
Lexington Law

Lexington Law is a legitimate law firm that specializes in credit repair. They only hire professional attorneys, which can be reassuring. They also offer a free initial consultation before you choose from one of their three monthly plans.
Credit Monkey

Credit Monkey is a credit repair service with plans that cater to many different types of customers. They also have a 90 day money back guarantee. To help you figure out which plan is best for you, Credit Monkey offers a free consultation.
When doing research, Credit Help Info relies on credible and authoritative sites. These research sources are provided so that you can see exactly where we get our information.
- https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-a-credit-repair-scam-from-a-reputable-credit-counselor-en-1343/
- https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
- https://www.ftc.gov/tips-advice/business-center/guidance/consumer-reports-what-information-furnishers-need-know
- https://www.ftc.gov/enforcement/statutes/credit-repair-organizations-act
About the Author
Chris Morgan
Chris Morgan is a credit expert and founder of Credit Help Info. He has been featured in Addition Financial, GOBankingRates, MSN Money, Yahoo Finance, and many other publications. He has read hundreds of books and resources on finance and the credit industry. Because he did this, you don’t have to. As a school teacher for over 20 years, Chris enjoys taking complicated material and breaking it down into manageable information that’s easy to understand.