Pros and Cons of Using a Credit Repair Company
Millions of Americans deal with errors or negative items on their credit reports. These issues can drag down your credit score and make borrowing more expensive. Some people turn to credit repair companies for help—but is it worth the money?
This article breaks down the pros and cons of credit repair so you can decide if hiring a company makes sense for your situation. We’ll cover the main advantages, the drawbacks, alternatives, and what to think about before signing up.
How Credit Repair Companies Work
Credit repair companies contact the credit bureaus on your behalf to dispute potential errors or unverifiable negative items. They follow the process outlined in the Fair Credit Reporting Act, which gives you the right to dispute inaccurate information.
It is important to know that they cannot legally remove accurate, verified information, even if it is hurting your credit score. Both the Federal Trade Commission and the Consumer Financial Protection Bureau warn consumers to be cautious of any company that promises guaranteed results.
If you would rather handle disputes yourself, you can send letters directly to the credit bureaus for free. For a step-by-step walkthrough, check out our Beginner’s Guide to Credit Repair, which explains how to review your credit reports, file disputes, and build positive credit history on your own.
Pros & Cons of Using a Credit Repair Company
Hiring a credit repair company has both benefits and drawbacks. Here’s what you need to know before making a decision.
Pros
- Saves time and effort: A credit repair company handles disputes and paperwork for you. This is helpful if you do not have the time or patience to contact each credit bureau yourself. It can also be a relief if the process feels overwhelming.
- Professional knowledge: These companies are familiar with credit laws such as the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). This knowledge can give you an edge when dealing with creditors and credit bureaus.
- May improve your credit score faster: Because they handle multiple disputes at once, you may see results faster than if you work through the process on your own. According to Experian, credit bureaus usually have 30 days to investigate a dispute, so getting everything filed quickly can make a difference.
- Can provide ongoing monitoring and support: Many companies include extras like credit monitoring, budgeting tools, or personalized advice. These services can help you stay on top of your credit after disputes are resolved.
Cons
- Costly monthly fees: Most credit repair companies charge between $50 and $150 per month. If your issues take several months to resolve, the total cost can add up quickly.
- No guarantee of results: Even if you pay for the service, there is no way to force a credit bureau to remove accurate information. The Federal Trade Commission warns consumers to avoid companies that promise guaranteed results.
- You can do it yourself for free: Disputing errors directly with the credit bureaus costs nothing. With a little time and effort, you can send the same dispute letters a company would. For guidance, see our article on how to remove negative items from your credit report.
- Risk of scams and shady practices: Some companies operate illegally, asking for payment before providing any service or making false promises about what they can remove. Both the Consumer Financial Protection Bureau and the Federal Trade Commission maintain resources to help you spot and avoid these scams.
DIY vs. Credit Repair Company
If you are weighing whether to hire a credit repair company or handle disputes yourself, it helps to compare the two approaches side by side. Each option has trade-offs in terms of cost, control, and risk.
| Feature | DIY Credit Repair | Credit Repair Company |
|---|---|---|
| Cost | Free | $50–$150 per month |
| Time Required | High | Low |
| Control | Full control | Company manages the process |
| Knowledge Needed | Basic knowledge of FCRA and FDCPA | Professional expertise provided |
| Risks | Time-consuming, steep learning curve | Ongoing fees, scams, no guarantees |
This table shows that the choice comes down to how much time, money, and confidence you have in handling disputes yourself. If you value control and want to save money, DIY credit repair is worth considering. If convenience matters more, a company may be a better fit.
Who Should Consider a Credit Repair Company
A credit repair company is not right for everyone, but there are situations where paying for help makes sense. You may want to consider using one if:
- You have multiple errors on your credit reports: Fixing several accounts across different credit bureaus can be complicated. A company can streamline the process.
- You do not have the time or patience to manage disputes: If your schedule is packed, outsourcing can save stress.
- You want guided support and are comfortable with the cost: Some people prefer the peace of mind that comes with professional help, even if they could technically do it themselves.
Alternatives to Hiring a Credit Repair Company
If you would rather avoid monthly fees, there are proven alternatives that can help you repair your credit.
- DIY dispute letters: Send disputes directly to the credit bureaus for free. Our guide on how to write a credit dispute letter walks you through the steps.
- Nonprofit credit counseling agencies: These organizations can provide budgeting help, debt management plans, and general credit education.
- Credit building tools: Secured credit cards and credit builder loans can help you build positive payment history over time. See our article on credit mix to learn how different types of credit affect your credit score.
Step-by-Step: How to Check Your Credit Report Yourself
You do not need to hire a company to review your credit reports. You can do it yourself in four simple steps:
- Request a free copy of your credit report at AnnualCreditReport.com.
- Review for errors such as late payments, collections, or duplicate accounts.
- Write a dispute letter to the credit bureau if you find mistakes.
- Track responses and follow up until the issue is resolved.
Conclusion
Hiring a credit repair company comes with both advantages and disadvantages. On one hand, you can save time, lean on professional knowledge, and potentially see results faster. On the other hand, the costs can add up, results are not guaranteed, and the same process is available for free if you do it yourself.
Weighing convenience against cost is the key. If you would rather not handle disputes on your own, reputable services like Credit Saint even offer a 90-day money-back guarantee.
Frequently Asked Questions
How long should you stay with a credit repair company?
Most people use a credit repair company for three to six months, depending on how many disputes they have. Staying longer than necessary can get expensive without adding much benefit.
Are credit repair companies worth the money?
They can be worth it if you have many errors on your credit reports and little time to manage disputes yourself. If you are organized and willing to put in the effort, you can often get the same results for free.
What happens if a credit repair company does not deliver results?
If nothing changes, you will still pay the monthly fees unless the company offers a money-back guarantee. This is why it is important to read the contract carefully before signing up.
Can credit repair companies help with identity theft issues?
Some companies may assist with disputes related to fraudulent accounts, but they are not a replacement for identity theft protection services. In most cases, you will need to work directly with the credit bureaus and creditors to resolve fraud.
