Method #2
Credit Repair Companies

Some Credit Repair Companies Are Great, Some Are Terrible. I'll Explain Why And Then Tell You Which Companies Are The Best

Intro:

I'm sure you've seen the advertisements in the newspaper, on TV, and certainly all over the internet. You know the ones, they make claims like:

• "Credit problems? No problem!"
• "We can erase your bad credit -- 100% guaranteed."
• "We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!"

Can they really do this?

Actually, yes...they can.

The two primary concerns you should have are not:

• Can they do what they say they can do?
• Are companies like this legal?

Instead your concerns should be:

• Is this particular company legit or a scam?
• Is the price that they are charging fair or way too high?

Personal Experience:

I should know about credit repair companies. I've used one.

It was able to remove quite a few negative accounts from my credit reports.

They didn't remove all of the negative accounts I had at the time, but that wasn't their fault. I simply didn't keep them employed long enough to completely removed all of the bad accounts.

The monthly payment for their services was $69 and I was at a point in my life where cutting back on my bills became my priority. So, out they went.

And, really, the price is usually the main reason why someone doesn't use a credit repair company or quits using a company or law firm that provides credit repair services.

Looking at the big picture, $69 a month plus an initial start up fee was chump change compared to the eventual savings in interest payments on loans and credit cards down the line.

I simply made the same kind of mistakes that most people make:

• I looked at the short-term monthly payment as opposed to the long-term savings in interest.
• I lost focus on the goal of getting and keeping good credit because I became distracted by the other things going on in my life.

Pros:

• Thousands of dollars less than the Time Method where you will waste your money due to higher interest rates.
• You will not have to read a really long course about credit repair.
• Far more effective than the Follow The Credit Bureaus’ Instructions Method.
• Much faster than waiting months or years for your negative credit accounts to reach their termination date and fall off your reports automatically.
• The company will write all of the dispute letters for you.
• If they are a good credit repair service company, they will know and use the latest techniques.
• They will keep track of each account: if it has been cleared or needs to be challenged again.

Cons:

• You end up doing as much or more work as if you did it yourself.
• Using a credit repair company is the most expensive of all five methods of bad credit repair.
• It will take longer than if you do it yourself.
• Some of your legal rights to dispute negative accounts are lost when you give someone else the authority to do it for you.
• You end up spending money with nothing to show for it if the credit reapir company you use is not legitimate.

Payment Plans:

There are three primary ways that credit repair companies charge for their services. The difference in how they charge is one of the main factors in whether a credit repair company is a good choice or a bad choice.

Credit repair companies can charge:

• One flat price to do the entire job of fixing your credit.
• A month-to-month price for as long as you retain their services.
• A set fee for each bad account they get removed from one of your credit reports.

Regardless of how they work, let me make it clear that if you are paying more than about $500 to a credit repair company for their services over a 6 month period of time, you are wasting your money.

The best companies that apply all of the possible services available for fixing your credit don’t charge more than about $500 over 6 months. If you are looking at a credit repair company that is charging more than that, tell them “No.”

Fee Per Bad Account

The worst of the three methods listed above is the third one. I’ve checked the pricing on several companies that charge per bad account removed. The average person will end up paying waaaay more than $500.

There is a credit repair company in my local area that charges per account removed. I talked to one of their sales reps about three years ago. At the time, the rep said that his average customer paid more than $1600 for their services. I believe he said they charged $50 for each account that was corrected or removed from a credit report.

If one of their customers had just one account removed from each of their three credit reports, then they were looking at $150.

Unless you can find a company that’s only charging about $5 per account fixed, I advise you not to use their services.

Month-to-Month

The second method listed above is the most common. Typically, these companies charge a set up fee and then a month-to-month fee for as long as you use their services.

That’s not necessarily a bad thing. In fact, four of the five credit repair companies that I recommend work in this manner.

Certainly, not all drag their feet, and choosing one of the more reputable ones that I have listed below should avoid this problem. But, it’s not in the company’s best interest to do the job as quickly as possible.

One Set Price

Finally, a few companies just charge you one set price to get the job done. This is the best option of the thre...again, as long as it's not more than about $500 for 6 months worth of service.

DSI Solutions is the top company that I recommend and one of the main reasons is because they work in this manner (they also cost less than $300).

They simply have no motivation to go slowly.

In fact, this payment plan motivates them to get the job done as quickly as possible. They aren’t going to get any more money from you, so the less effective and efficient they are, the more it costs them.

Recommendations:

I've studied several different credit repair companies. There are quite a few out there, but there are only a few that are worth considering.

I've put together in-depth reviews of the five main companies in the credit repair industry and highlighted the strengths and weaknesses of each for you to consider.

Of these five you should pick one of the top two, if for no other reason than that they are less expensive. Even when you get down to the top two companies though, I still feel that one company is the clear winner.

In order of rank, here are the reviews for the top credit repair companies:

1. DSI Solutions Review
2. Sky Blue Credit Review
3. Ovation Law Review
4. Lexington Law Review
5. Veracity Credit Review

You can also get a visual summary of the reviews with this helpful Credit Repair Company Comparison chart and see how these companies compare to each other side-by-side.

Additional Details:

Some experts will tell you not to work with a credit repair service company.

But I disagree for two reasons:

1. Since I've used such a comapny and saw the results, I know that they do in fact work.
2. If you have the money to pay for the services, they will keep you on track and moving forward. When working on your own, it is easy to become lazy and fail to take the remaining steps in the process.

If you know that you aren't organized enough to stay on top of it, or motivated enough to stick with the game plan all the way to the finish, then the credit repair companies have a valid argument for being the method of choice.

But, let me emphasize a couple of the negatives. Although it's tempting to simply pay a company to do the work for you, most of the credit repair companies have a few weaknesses that they don't want you to know about.

First, as mentioned earlier, most charge a monthly fee for their credit repair services, so its really not in their best interest to do the job quickly.

Second, its faster to do it yourself. There is a delay in the process, since credit reports and other paperwork from the credit bureaus must be sent to you, and then you must forward it to your credit repair company. Next, you wait for your account rep at the company to get to your file and take the next step in the process.

Finally, there is a substantial amount of effort on your part. It’s pretty much a no brainer, but you still have to do the work.

Just so you know, the primary work that's involved is:

• Filling out several forms (including Power of Attorney documents),
• Receiving and forwarding, to the credit repair company, all of the credit reports and other documents you get from the credit bureaus. These documents may not be legally sent to anyone but you.

Conclusion:

Credit repair companies really can do what they say they can do and most are legal.

If you do a search for "credit repair companies" online, you can feel confident that the companies that pop up at the top of that search are legitimate.

As for the price, credit repair should not be more than a total of about $500. If you're being charged more than that, the company could still be quite legal, but why go with them when there are other companies that provide the same services for less?

All of the companies I've recommended will be found at the top of any search you might conduct and will charge reasonable prices.

Still, I feel that this is the 2nd best method for repairing your credit. There are pros and there are cons, but the cons are certainly not show stoppers.

That being said, there's more than one reason as to why I think this is the 2nd best method, not the best one.

So, let's move on to my favorite. I'll give you the details as to why I believe it's the best method to use to restoring your poor credit.