Should you pay for a credit repair service?
A bad credit hurts you In many ways. It’s harder to get loan approval, rent an apartment, and find a job. You pay more interest on the loans you get. Insurance is more expensive. This can put a strain on your relationships.
Not to mention it just feels crappy.
That your low credit score is due to misguided spending decisions or a catastrophic life event, the results are the same: your financial options are limited, your stress is high, and you’re eager to get things sorted out as soon as possible.
Credit repair companies are one way to do this, but are they worth the cost? Let’s take a closer look.

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What Credit Repair Companies Can Do For You
Credit repair companies can’t work miracles. What they can do is:
1. Fix errors on your credit report
One in four credit reports contains errors. These include spelling mistakes, incorrect balances, and paid accounts still showing as open. Credit repair companies can bring these items to the attention of the credit bureaus and have them repaired, thereby increasing your credit score.
What you should know
You can correct errors on your credit report yourself.
2. Challenge the negative elements of your credit report
Negative things like late payments, bankruptcies, and debts that are in collection hurt your credit score. Credit repair companies can challenge these items and have inaccurate ones removed.
What you should know
The credit bureaus have 30 days to verify a negative item on your credit file. Some credit repair companies use a “spray and pray” strategy, challenging every negative item on your report in the hope that the bureaus won’t check them in time and they’ll be removed (even if they’re correct).
It might work temporarily. But the creditors have the right to recheck the negative elements. If a negative item was correct, it could reappear on your report in a few months, leaving you no better than before.
3. Negotiate with your collectors
Sometimes creditors will remove negative items from your credit report if you give them something in return. For example, you pay a certain amount to have a collection deleted (an arrangement known as “pay to delete”). Or, you ask the creditor to remove late payments from your report once you have paid off the entire debt.
Credit repair companies can contact your creditors on your behalf to see if they are willing to consider these actions. Reputable companies can find out which creditors are open to these negotiations and on what terms.
What you should know
You can negotiate with your creditors yourself. Temporary measures such as payment for deletion can give your score a quick boost, but your best bet is to negotiate a payment agreement so that your debts are paid off once and for all.
How much does professional credit repair cost?
Credit repair companies typically charge between $20 and $150 per month for their services. Since the credit repair process can take several months, the cost can add up quickly. You may also have to pay start-up costs.
So should you pay for a credit repair service?
Short answer: Preferably not
longer answer: You can do everything a credit repair company can do on your own, for free. You don’t have to pay for someone to do it for you.
Yes, outsourcing the work saves you hassle. But if you’re at the point where you need credit repair, spending unnecessary money every month isn’t the best idea. You are better rebuild your credit yourself.
That said, the cost may be worth it if you think help is the only reasonable way to repair your credit.
Maybe you have a lot to do right now. Maybe you’re not good at keeping track of things, like which creditors you contacted and when. Maybe that sounds too intimidating, and if you’re honest with yourself, you know it’s more likely to get done if someone does it for you.
In these cases, it’s better to seek professional help than to let your bad credit rating stay in place, which will hurt you financially for years to come. But for most people, going DIY is a better idea.
Avoiding Credit Repair Scams
If you decide to use a credit repair service, be sure to choose one that is reputable. Scam artists abound, but they are fairly easy to spot.
Know your rights under the Credit Repair Agencies Act (CRAO). The CROA states that credit repair companies:
- Cannot provide false or misleading advertising information, such as a guarantee that they can improve your score by a certain number of points
- Must provide details of the plan in writing, including the total cost you will pay and the time they estimate it will take to see results
- Unable to bill you in advance
- Must give you three business days to cancel without penalty
- Must disclose that you have the right to self-repair your credit
If a credit repair company breaks any of these rules, it is not up. Other signs of scam include:
- Encourage you to lie or hide information from credit bureaus
- Telling you not to contact the credit bureaus yourself
- Advise you to create a new identity
- Promise a quick fix
- Claiming that they can permanently get rid of the specific negative elements of your report
When considering credit repair companies, check customer reviews online and search for the company on the Consumer Financial Protection Bureau Complaints Database. The US Department of Justice also has a state-by-state list of licensed credit counseling agencies.
Last word
Whether you choose to repair your credit yourself or pay someone to help you, it’s important to know how to avoid getting into debt in the future. Pay your bills on time, never bill more than you can afford to repay in full each month, and review your credit report regularly to make sure everything is correct.
Use credit responsibly and you can maintain that brand new high score for years to come.