Key takeaways

  • Credit repair consists of finding and fixing mistakes on your credit report to boost your score.
  • Credit repair is something you can do on your own for free but it can be time consuming.
  • Credit repair companies can make this process easier by working on your behalf in exchange for a fee.

If you have low credit and aren’t sure how to grow your score, working with a good credit repair company might help. Credit repair companies help you repair your credit by disputing false negative claims on your credit report. That said, there are limitations to what these companies can do to boost your credit. Understanding this and how they work is crucial before signing a contract with one.

What is a credit repair company?

Credit repair companies help consumers improve their credit scores in exchange for a fee. They do this by finding mistakes on your credit report and disputing them with the three major credit bureaus to get them removed. These companies can’t do anything you can’t do yourself for free — you can take steps to clean up your credit report. However, working with one can be beneficial if you lack the time or knowledge to do this on your own.

“Think of a credit repair company like you’d think of a tax preparer. Sure, you can do your own income taxes, but sometimes it’s worth the money to hire a professional,” says Howard Dvorkin, CPA and chairman of

Sometimes debt relief companies will offer ways to improve your credit. These services may include debt consolidation products to help improve your credit score and make your debt more manageable.

You can also seek debt consolidation loans on your own. Be mindful that these are unsecured loans and lenders will rely on your credit profile to determine your interest rates. If you do decide to go this route, you may end up with a high interest rate until you improve your credit and refinance the loan.

How does a credit repair company work?

Whether you hire a third-party to repair your credit or go the DIY approach, the process will look the same. The main difference is that a credit repair company does the legwork for you with the first option.

First, the company will request a copy of your credit reports from the three major credit bureaus: Experian, TransUnion and Equifax. Then it will do an in-depth analysis to spot any potential mistakes. These can range from accounts that don’t belong to you to incorrect balances or old negative marks that shouldn’t be showing up anymore.

Once the company identifies these mistakes, it proceeds to dispute them with the credit bureaus or organizations that reported the inaccuracies. It does this by sending letters, emails and making phone calls on your behalf.

The end goal is to get these items removed from your credit report. It’s also worth noting that the company you hire must repeat this process for each mistake it finds on your report, which can be time consuming.

How does credit repair help your credit score?

Credit repair can boost your credit by removing inaccurate negative information from your report. However, the results will depend on your particular situation.

Any company you hire can only remove actual mistakes, the same as you. If something is accurate, there’s nothing you or the company can do to remove it from your report. If a company guarantees results before analyzing your situation it’s likely it isn’t a legitimate service.

Vet a credit repair company’s legitimacy through the following steps:

  • Know what credit repair companies are allowed to do. The Federal Trade Commission (FTC) created the Credit Repair Organizations Act to regulate credit repair companies. Credit repair organizations aren’t allowed to lie to you about what they can do or ask for payment before providing services.
  • Watch out for red flags. Any legitimate company should follow the regulations provided by the FTC. For example, the repair company should send you a contract prior to working with them. If the FTC regulations aren’t being followed, you’ll want to find a new company.
  • Don’t pay for credit repair services without results. Stay away from credit repair companies that ask for payments upfront. This is illegal and should be reported to the FTC.
  • Look for consumer feedback. Read through reviews on the Better Business Bureau (BBB), Trustpilot and Google. If the company has a poor BBB rating or the majority of reviews are negative, it might be best to look for a different credit repair company.

How long does credit repair take?

The time it takes to repair your credit depends on the extent of damage. If your credit history is mostly good, getting a few incorrect items from your report could take a couple of months.

But, if you have a generally poor credit history, you will need to do more than remove a few inaccurate items from your report in order to improve your credit. Repairing credit in this case will require you to change your spending habits and the ways you manage your debt.

Making timely payments on any debt you have and diversifying your types of credit utilization will help improve your credit over time. Paying down your debt will also help get your debt-to-income ratio in better shape. This can take as long as a few years to have an effect on your credit, depending on the state your credit score is in at the start.

The bottom line

Repairing your credit can push your credit score in the right direction, making it easier for you to qualify for a loan or credit card with favorable terms, among other things. Using a credit repair company can make this process easier, but it also comes at a cost. Ensure you understand what companies can and can’t do to determine if it’s worthwhile or if you’d be better off with a different approach.