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How Much Does Credit Repair Cost?
By Cassidy Horton MONEY RESEARCH COLLECTIVE
The cost of credit repair depends on whether you’re going to do it yourself or hire someone to do it for you. The best choice for your situation will depend on factors such as the number and type of negative items on your credit reports, your experience in dealing with credit bureaus, and your discipline and determination. In some cases, DIY will work just fine. In others, professional assistance can be massively helpful – but it will cost a lot more. Here’s a closer look at credit repair, the pros and cons, and the average costs for hiring a pro.
Table of Contents
- What is credit repair?
- Pros and cons of hiring a credit repair company
- How much does a credit repair company charge?
- How do credit repair companies work?
- How much does a credit repair cost FAQs
- Summary of our guide on how much credit repair costs
What is credit repair?
Credit repair involves taking steps to improve the state of your credit reports and scores. It can include paying down balances, having erroneous negative records removed, opening new accounts, and more.
While you can work to patch up your own credit history, there comes a point when calling in a credit repair company can be a good idea. Often, that point comes when you’re dealing with issues such as multiple late payments, charge-offs by lenders, judgments, collections, or repossessions. But it will cost you.
In these cases, the stakes are high. You could get sued by creditors or debt collectors and have your wages garnished. Further, you’ll likely be suffering the crippling effects that bad credit can have on daily life. Credit repair companies can assess your situation, ensure you know your rights, and help you resolve your issues as quickly as possible.
Pros and cons of hiring a credit repair company
If you’re considering hiring a credit repair company to fix your credit, here are the main pros and cons to consider.
Pros of credit repair
- Gain an advocate for your rights as a debtor
- Learn how to repair bad credit as fast as possible
- Get help removing erroneous negative items from your credit reports
- Save time researching laws, contacting creditors, etc.
- Get access to credit counseling on-demand
- Learn which new credit account types could benefit you
- Receive credit score progress reports and alerts
- Gain access to your credit reports and scores (varies by company)
- Get money back if you’re not satisfied (varies by company)
- Gain other benefits such as identity theft insurance (varies by company)
Cons of credit repair
- Monthly service fees average around $100
- Startup fees are often required
- Some companies limit the number of disputes allowed per month
- Results can’t be guaranteed (although moneyback guarantees are sometimes offered)
- If not careful, credit repair companies can trigger more aggressive collection attempts/lawsuits
- You have to watch out for credit repair scams
- You might be able do everything they can do for free
How much does a credit repair company charge?
The cost of hiring a credit repair company will depend on the company and plan you choose. However, most charge a one-time setup fee that ranges from $19 to $99, and an ongoing monthly fee that ranges from $79.99 to $119.99.
While the plans can seem expensive, most are month-to-month, allowing you to cancel at any time. Further, if a credit repair company can help you build credit faster than you otherwise could, it can be worth the fee many times over. That said, many offer a warranty of some sort so you can get money back if you’re not happy with the results.
How do credit repair companies work?
The professional credit repair process starts when the company you hire pulls your credit reports and scores from the three major credit bureaus (TransUnion, Experian, and Equifax). Using that information, they will come up with a plan to minimize your negative entries and maximize positive ones. Then, with your consent, they’ll get to work on trying to improve your credit record.
Most credit repair agencies focus on using dispute letters to attempt to have questionable negative items removed from your credit history. How does that work? Well, as per the Fair Credit Reporting Act (FCRA), you have the right to dispute inaccurate information with the credit bureaus. When an account is called into question, it must be verified by the debt owner. If it can’t be verified, then the credit bureaus have to remove it.
Additionally, credit repair agencies often offer credit monitoring, credit score/report access, customer support, and recommendations on how to build your credit. Some also offer perks like identity theft monitoring and insurance.
How much does credit repair cost FAQs
Is it worth paying someone to fix your credit?
It can be worth it to pay someone to fix your credit, but that will depend on your situation and the company you hire. If you already have a good credit score, a credit repair agency may not be able to do anything that makes much of a difference. However, if you have erroneous negative entries, a credit repair professional may be able to help you get them removed, which can dramatically increase your credit scores. A higher FICO score or VantageScore can pay you back many times over by helping you get lower interest rates and access to capital (credit cards, auto loans, personal loans, etc.).
Can you repair your credit yourself?
You certainly can repair your credit yourself. Everything that a credit repair company can do, an individual can do too. However, it can take some time to get acquainted with how the whole system works and the laws and techniques that can help you. Further, it requires time to file disputes, contact creditors and collection agencies, draft letters, and negotiate with creditors.
How much does it cost to clean up your credit?
If you want to hire a credit repair agency, it will cost you around $100 per month, on average. If you want to do it yourself, it will instead be an investment of time and effort. Additionally, you may face costs if you need to pay down balances or if you negotiate a payoff settlement.
How long does credit repair last?
You can typically subscribe to a credit repair service for as long as you want the assistance and benefits. As for the lasting impact of credit repair, when an agency helps to get a negative item removed, it should be removed for good. However, to maintain an improved credit score, you'll need to continue to earn it by paying bills on time, keeping credit utilization low, and following other credit best practices.
How much does it cost for a credit repair kit?
Some companies offer credit repair kits to teach you how to repair your own credit. They range from free up to around $25, in most cases.
What is the average fee to fix credit?
Most credit repair companies charge a monthly fee that starts at around $80.
Where can I find the best credit repair companies?
We reviewed and compared a variety of credit repair companies to find the best on the market. Some of our top picks were Lexington Law, Ovation Credit Repair, The Credit People, and Credit Saint.
How can I check my credit reports from all three credit reporting agencies for free?
According to the Federal Trade Commission (FTC), you have the right to obtain a free credit report from each of the major credit bureaus one time each year. You can do so by visiting annualcreditreport.com.
How do I know if a credit repair agency is scamming me?
According to the FTC and Consumer Financial Protection Bureau, the main red flags to watch out for include large upfront fees and promises to remove accurate negative information. The Credit Repair Organizations Act (CROA) also requires that credit repair contracts be in writing so if a company tries to make an oral agreement, don't move forward.
Should I give a credit repair company my social security number?
You will need to provide your credit repair agency with your social security number so that it can access your credit information with the three major credit bureaus. However, before you do so, be sure to do your homework on the company to ensure the company is legitimate — for example, you can look up the company with the Better Business Bureau (BBB) and see if it's been flagged by the FTC.
Summary of our guide on how much credit repair costs
- Credit repair refers to the process of taking steps to improve your credit reports and scores.
- Credit repair agencies specialize in getting negative inaccurate information removed from credit reports.
- They may also track your credit, answer your credit questions, and advise you on various ways to improve your credit scores.
- You can technically do anything a credit repair company can do yourself.
- Unfortunately, creditors and collectors often benefit from what you don’t know.
- If you’re not an expert in credit law and negotiations, a credit repair company can serve as your advocate and level the playing field.
- Credit repair companies are most helpful for people with poor credit and multiple negative marks on their credit reports.
- Your credit repair results will depend on your situation and the expertise of the credit repair agency you choose.
Cassidy Horton is a finance writer based in Seattle, Washington. With an MBA and a bachelor's in public relations, her work has been published over a thousand times by The Balance, Finder.com, Money Under 30, Clever Girl Finance, and many more. Cassidy is a self-confessed money nerd who’s passionate about helping people find financial freedom. Oh, and she really loves cats.