Credit Building Tips

How Much Does a Credit Repair Service Cost?

Shaun Connell
April 21, 2023

If your credit score has seen better days, you might be struggling to get a loan, rent an apartment, or qualify for a credit card.

To help improve your chances as an applicant, credit repair services will often promise to help boost your credit score. These are companies that will review your credit reports and act on your behalf to address any negative items with the credit bureau.

Solution iconCredit repair services will help you dispute incorrect information on your credit report in exchange for a fee-- usually a monthly fee ranging from $20 to $150. There can be additional charges for these services, including start-up fees and cancellation fees.

It's important to understand that there are scammers out there masquerading as credit repair services, so you'll want to learn about the red flags to watch out for. Additionally, it's worth noting that credit repair services don't have magical abilities to clean up your credit report-- everything they do is something you can do for yourself for free.

What Are Credit Repair Services?

Credit repair services help you come up with a plan you can use to repair your credit and will act on your behalf in order to dispute inaccurate information.

paying to have credit repaired from credit repair service

Essentially, these companies can help you remove errors or other incorrect marks on your credit report that are damaging your score. What they can't do, however, is remove accurate information.

Some of the types of items that a credit repair service can remove include:

  • Unrecognized collection accounts or charge-offs
  • Incorrect spelling of your name and contact information
  • Inaccurate late payments
  • Mistaken loan or credit card balances
  • Accounts that should have already fallen off your credit report

You'll often find that credit repair companies will offer extra features for additional fees, such as:

  • Writing letters of recommendation to lenders
  • Writing cease and desist letters to debt collectors
  • Offering free credit report updates

In many cases, these extra services aren't worth the steep fees that are charged.

Can You Pay to Have Your Credit Repaired?

If your credit is less than ideal and you want to improve your score, the concept of credit repair services might sound too good to be true.

The truth is, though, that a credit repair company isn't going to be able to help you remove accurate information from your credit report.

  • They can only help you remove inaccurate information that is damaging your credit score and file.

For instance, if you have a high credit utilization ratio, several late payments, or other derogatory marks, credit repair services won't be able to help if the information is correct.

Did you overdraw your bank account and you're worried it's going to ding your credit? Check out this article to learn more about whether a bank overdraft affects your credit score.

How Much Does a Credit Repair Service Cost?

When shopping around for credit repair companies, you'll find that they all tend to have their own pricing structure. Typically, though, they sell packages of services and charge fees monthly.

  • The cost of using a credit repair service will often range from $20 to $150 per month.

In addition to the monthly fee, some companies charge enrollment or set-up fees as well as fees when you cancel the service. You can find some companies that will offer a money-back guarantee, but this isn't always the case.

It's common for companies to have policies that essentially require you to stay signed up for several months.

For example:

  • They might only allow you to delete a certain number of marks per month, meaning that you might have to pay the monthly fee longer than intended in order to have all of the marks removed.

Should I Repair My Own Credit?

Only you can decide whether or not it's worth the cost to hire a credit repair company, but it's important to note that pretty much anything a credit repair service can do for you, you can do for yourself.

  • If there is inaccurate information on your credit report, you can dispute the information all on your own for free.

equifax dispute credit card repair

To do so, you'll want to follow these steps:

  1. Request each of your credit reports from the three major bureaus at a site authorized by Federal law
  2. Carefully review your credit report and highlight or circle any mistakes you see
  3. Dispute the errors with the credit bureaus that reported them-- you can do this over the phone, through the mail, or online.
  4. Wait to receive a response about the decision the credit bureau made in regard to the inaccuracy.
  5. Re-check your credit one or two months later to make sure the error has been removed if the credit bureau said it would be

Was your identity stolen and it took a serious toll on your credit file? This guide goes over how to repair your credit after ID theft and fraud.

Credit Repair Services FAQ

The idea of paying someone to repair your credit report can seem a bit too good to be true at first, and there are certainly companies out there that make promises they simply won't be able to keep. Here are some of the most commonly asked questions about credit repair companies to help you determine whether paying for one of these services is the right choice for you.

How Long Does It Take to See Results From Credit Repair Services?

It can take several months to start seeing results after you've signed up for a credit repair service. The length of time it takes for your credit to be fully repaired can be six months or even longer.

It's also possible that the inaccuracies you had fixed will end up showing up on your credit report again down the road, so you'll still want to keep an eye on your report.

How Do Credit Repair Services Work?

  • When you hire a credit repair company, they will work with you to create a plan to fix your credit.
  • They will also act on your behalf when communicating to the credit bureaus and creditors to dispute any errors or inaccurate information on your credit report.

You can find credit repair companies that operate nationally, while others only offer their services in certain states.

Depending on the package of services you purchase from a credit repair company, you also might receive credit monitoring services. This means that they will keep an eye on your credit report for any changes that could potentially stem from fraudulent activity.

Are you trying to improve your credit health? Check out these posts about removing charge-offs, collections accounts, hard inquiries, evictions, and 30-day late payments from your credit report.

How Can I Avoid Scams When Looking For a Credit Repair Service?

Unfortunately, scammers can be attracted to the field of credit repair. There are plenty of legitimate companies out there, but you'll want to be on your toes when choosing one to make sure you aren't sending money to a party that has no interest in helping you.

There are a number of things you'll want to watch out for when seeking credit repair services.

According to the Consumer Financial Protection Bureau, some of the signs of a credit repair scam include:

  • Making promises to remove any derogatory marks on your report: A credit repair company won't be able to get accurate information removed from your credit report, only inaccurate information. Some legitimate companies will charge extra fees to send goodwill letters in order to try and remove legitimate marks, but they still won't promise to be able to remedy this issue.
  • Making you pay before you've received services: While there can be enrollment or set-up fees for credit repair services, you generally want to stay away from any companies that try to pressure you to pay upfront.
  • Recommending that you don't contact the credit bureaus: A reputable and legitimate credit repair company won't tell you not to contact the credit bureaus-- after all, communicating with the credit bureau is one of the essential steps in fixing your credit report.

Is It Worth Using Credit Repair Services?

It's important to understand that pretty much anything a credit repair company can do for you is going to be something you can do for yourself. They don't have magical abilities to fix your credit report, but they do have experience going through the dispute process and otherwise engaging with the credit bureaus.

Additionally, there is still some work you will have to do on your own, even if you hire credit repair services.

All that being said, some consumers find that it is worth the money to have credit repair companies take on some of the work of disputing inaccurate information on their credit reports.

What's the Difference Between Credit Counseling and Credit Repair?

While credit repair and credit counseling services might sound kind of similar, they are actually two very different services.

  • Credit repair services are designed to help you remove inaccurate information from your credit report and improve your credit score.

Credit counseling is tailored to your specific situation and consists of receiving financial advice from a credit counselor. They will also be able to offer you resources that give you the information you need to improve your financial situation. Consumers will typically seek credit counseling when they need advice on how to get themselves out of debt.

Will a Credit Repair Company Wipe My Credit Clean?

Your credit profile will not be wiped clean by a credit repair company. Legitimate negative information on your reports, such as bankruptcy, default, or late payments, will age off your reports after a certain number of years, depending on the nature of the mark.

Here is how long it takes for specific information to fall off of your report:

  • Soft pull: no impact on your report
  • Hard pull: two years
  • Delinquent payment: seven years
  • Default account: seven years
  • Foreclosure: seven years
  • Bankruptcy discharge: seven to ten years

Credit repair services are only able to dispute incorrect information on your credit report. Some services might offer to send a goodwill letter to your creditor or debt collector on your behalf in order to ask them to remove the derogatory marks. However, creditors and debt collectors are not obligated to honor these requests.

Beyond Removing Incorrect Info, How Can I Improve My Credit?

Unfortunately, we can't just wipe the slate clean and start over with our credit reports. What we can do, though, is take actions that help to improve our credit scores.

Some of the things you can do to rebuild your credit include:

  • Paying down high balances
  • Making payments on time
  • Regularly monitor credit reports for inaccuracies
  • Add positive data to your credit reports using tools like Experian Boost
  • Take out a credit builder loan

Will My Credit Score Increase If I Open a New Credit Card?

Believe it or not, it can actually hurt your score to open a new credit score-- at least immediately. It will, eventually, start to help your credit score.

This is because the credit card company will run a hard pull of your credit when you apply, which can ding your credit.

  • These hard pulls can stay on your report for up to two years.

However, you'll soon start to appreciate the benefits of having a new card because your credit utilization ratio will drop, which is a metric where lower is always better. Making up roughly 30% of your FICO score, giving yourself a more advantageous credit utilization ratio can be a fairly quick way to boost your credit score.

Is It Time to Improve Your Credit Score?

Whether or not it's worth the cost to hire a credit repair service is something that only you can decide. It's important to be diligent when choosing a credit repair service, though, as there are definitely scammers out there that make lofty promises and don't return any results.

Beyond that, remember that credit repair companies cannot delete correct information from your credit report. They can only dispute incorrect information with the credit bureaus on your behalf. In some cases, they might also send goodwill letters to debt collectors on your behalf to attempt to have accurate negative accounts removed, but there is no guarantee that this effort will be successful.

If you don't want to take the time or deal with the headache of interacting with the credit bureaus when there's an error on your report, you might find that it's worth it to pay a credit repair company. That being said, you might find that the money is better spent going toward your debt and that you can actually handle the disputes on your own without paying start-up fees, monthly fees, and cancellation fees.

Are you ready to improve your credit score and make yourself a more appealing borrower to lenders? Make sure you check out our credit building tips blog for more resources to help you boost your credit and clean up your report.

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Written By:
Shaun Connell
Shaun Connell is a personal finance and credit expert with a passion for helping individuals eliminate debt and improve their credit. He's enjoyed writing investing and financial content for over 15 years, with expertise in real estate, debt, banking, credit, and wealth building. His work has been seen by millions on the web.

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