As the conditions surrounding the pandemic continue to improve many people are starting to plan for the future, but lingering credit score issues might be standing in the way. News 5 gets some expert advice on the credit repair process and things to consider before hiring a company to help you.
With the economic challenges of the last year, there are many people looking for opportunities to improve their credit score. Financial experts say taking the right steps in this process will be helpful and could save you money.
The first piece of advice to set you up for success is to do some work on your own first. You can request one free credit report each year from Transunion, Equifax, and Experian. If you see a mistake consumers have the ability to dispute anything on that report.
If you do decide to hire a company to help you manage the situation, take a closer look at what their staff looks like and if an attorney is part of the team. Experts at Debt.com say it adds credibility to the process.
"The federal government put laws in place that doesn't allow a company to charge fees upfront. However, some of the companies try to get around that. So be careful of that," said Debt.com financial expert Howard Dvorkin.
There will likely be fees to retain their services while they do the work, but what you're trying to avoid is paying them big money up front and then they disappear.
"If they're charging maybe a hundred dollars a month or less, it's still okay to pay them. It's where they charge $500 or $1,000 up front and promise that they're going to clean your credit up, that's where the consumers get themselves in trouble because they'll pay out the money, and there's very little incentive for the company to do the work," said Dvorkin.
Remember when it comes to your credit you're going to divulge all your most sensitive personal data to any company you choose to work with, so a stellar reputation is imperative.
Some credit repair companies will offer a money back guarantee. If it's a well respected company with good reviews, experts say this is the deal you want.
"Because they are confident that they're going to do their job," said Dvorkin.
But if a company guarantees results it could be a red flag. Disputing errors on your credit report is a legal process, so they only can do what the law allows them to do.
"No company can guarantee removal of an item. They only can do what the law allows them to do. The real power is within the credit bureaus. They're the ones who have the ability to remove an item or frankly not remove an item," said Dvorkin.
So, according to the experts these are the things to do if you're looking to hire a company to help with your credit...
- Evaluate the company
- Check the staff
- Avoid money upfront
- Look for money-back guarantees
- Don't fall for guaranteed results
Here are some additional tools and tips offered by the experts at Debt.com: