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Credit Repair 101:

by Denecia Andrews about a year ago in personal finance
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The Pros and Cons of Credit Repair Programs

When you hear the words credit repair, what’s the first thing that comes to mind? For most people, it’s a) wondering what’s on your credit that’s negatively impacting it and b) how can I get this removed. The next thing that comes to mind is immediately finding some sort of credit repair program or person that can make miracles happen overnight. This is always the first go to. The number one deterrent to that is the cost. Credit repair services make their money solely off of our desperation. This may sound harsh, but it’s true.

For instance, if you’re trying to get a house and you have some negative or derogatory marks on your credit, you quickly start trying to figure out how to remove them. If you aren’t aware of how to do this yourself, the next likely source is to pay someone to do it. Normally we think that by paying someone to do this, that these items will be removed quickly and your score will jump from 520 to 785 in just a matter of weeks. I am here to tell you, that is simply not true. Things like this take time and patience. Time and patience that many of us don’t have. Trust me, it would be nice if credit scores and reports worked this swiftly. We’d all be in luxurious homes, riding around in Maseratis and Bentleys.

I never understood the importance of credit and how useful it can be until I became a business owner. I currently own a cleaning service. While it doesn’t take much to start up in this industry, let me just say, having fair to good credit would have been a huge help. I say this because there are all sorts of funding out here for business owners that I was unaware of. The one thing holding me back is my less than perfect credit score. While it’s not horrible, it’s not getting me much either. Had I had fair to good credit, I’d have more access to funding and credit cards which would help with capital. This is something that is vital to a business. While I am one of the few who took steps to make sure my business doesn’t sink because of this, everyone isn’t so fortunate. When you are running a business solely off the sweat off of your back with no help from loans or other fundings, it forces you to be more financially disciplined and aware. We will save this topic for another article I will write later on down the line.

I spend a lot of time on my computer researching random things when I’m not working. I’ve heavily researched credit and credit repair. What I find is that they charge you for things you can do on your own. They pull your credit report, go over everything on your report with you and determine which items need to be removed and which ones should stay. This is all a part of the consultation services. Once you all have established needs and goals, they then go over how their services work. This where costs are discussed. The average credit repair company charges around $125 to $150 to get started, then a monthly fee of $50 to $75 for recurring services. They will tell you that they are going to dispute this and dispute that and have this removed and have that removed. That all sounds good right? Yes, I know. What they will not tell you is that you can do all of this yourself. I mean why would they? They’d never make any money if they told you how to fix your own credit. Their purpose would be null and void. Well, that’s the purpose of this article. To make their presence in your credit repair journey null and void. Before I go any further, this article is for people who do not have serious remarks on their credit histories. If you have bankruptcies, evictions, foreclosures, repossessions, or anything of the sort, a credit repair program may be your only option.

For credit repair to be successful, it is going to take time. There is no other way around this. Time is going to be your best friend when it comes to improving your credit. Patience will be your next best friend. You have to invest the time into your credit history as you would anything else you were working towards. You need the time to view your credit report and look at what is causing it to be so low. This is where you can make your determination on whether you want to go ahead and pay off the debt or dispute it to have it removed. If it’s affordable enough for you to pay it off, I’d recommend paying it off. If you are trying to establish payment history, try to negotiate payment arrangements with the debtor/collector. If you want to just do away with it completely (as do most of us), then file your dispute letter.

I know, you’re probably thinking, how on earth do I file a dispute letter? Well I can tell you from experience, it’s not hard to do at all. You can even find the dispute templates online and mail them off yourself. With websites like Credit Karma and Experian Boost, this can all be done with the click of a button. No hassles, no charge, no confusion! Everything is plain and simple. You have everything right there in front of you. You can even monitor your progress yourself. You don’t have to rely on third party interference.

I took the advice of someone else and jumped into a credit repair program. I really wish I would have researched everything for myself before I did this. I was stoked to find out that the money I paid for someone to repair my credit, could have been done myself. Thankfully, the program I signed up for doesn’t have any obligations so I can cancel anytime for no charge. While the program did get a jumpstart on getting things removed from my credit, I now realize this whole time, I could have gotten my own jumpstart. I didn’t need third party interference. I know, some of you are like why didn’t I take my own advice. I can definitely see the irony here. If you will allow me to explain, here’s why:

No one tells you that credit repair is easy. Everyone assumes that your credit needs to be tailored to whatever you are trying to accomplish at that moment;

People make credit repair out to be this daunting dreadful task that many of us are just scared to even go near;

I was desperate. I jumped head first into it thinking that this would be some overnight miracle; and lastly,

I just really felt like I didn’t have the time to do all of that. I figured it’s people out here who gets paid for this, let them do it.

Whew Lord, was I ever in the wrong line of thinking. If I had known then what I knew now, the money I paid out for credit repair would still be in my pocket.

I know I’m making credit repair programs out to be this wolf in sheep's clothing. I can tell you that it’s not. There are some good qualities to be in a credit repair program. If you are not one to monitor your credit regularly, then a credit repair program would be good for you. They provide services that assist with this. If you are unsure of how credit disputes work, then a credit repair program may be a good fit for you. It wouldn’t hurt to sit through the consultations and weigh your options. If you aren’t a person who will take the time to invest the time into repairing your credit, then a credit repair program may be a good fit for you. If you are one of the many individuals dealing with the heavy stuff (i.e. evictions, foreclosures, etc.), then a credit repair program would be a good fit for you. I recommend doing extensive research before jumping into a credit repair program.

Another pro to using a credit repair program, is many of them offer identity theft monitoring. With the pandemic going on and so many people out of work, people are getting more creative by the day. More people have more time on their hands because they are home more. This means that identity theft is on the rise. With identity theft monitoring, this gives you complete control over what is trying to get approved or prequalified on your credit reports. Most credit repair programs will cover all three bureaus so the monitoring will cover all of your credit reports.

Some credit repair programs come with 12 step programs. Some may offer this at an additional cost, while others may include it in their monthly service fees. These programs are designed to help you increase your credit score while they work hard to remove items off of your credit. Some of the services may be suggestions for secured credit cards, or may be taking out a small loan from the bank. Some of the services may even use the bills you currently have. This is a way for them to monitor your repayment history.

I could go on and on about the pros and cons of credit repair programs; however, I think you get my drift. Basically, if you don’t really need to jump into a credit repair program, then why would you? A little research goes a long way. At the end of the day, it is all about doing what you feel is best for you. This is me trying to help you keep as much of your money in your pocket as possible.

personal finance

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Denecia Andrews

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