When you have bad credit, it can feel like moving the needle in the right direction on your credit score is difficult, if not impossible. Although there are some shortcuts you can take to boost your credit rating, it can take months or even years for a bad credit rating to climb into the good range. When you desperately need a new car and a car loan to finance it, it begins to feel like an eternity. Enter credit repair companies. These businesses promise to take on the heavy lifting of improving your credit quickly. Are these empty promises or are credit repair companies the real deal? We’ll break down what credit companies do, their pros and cons, and alternative actions you can take to improve your score.

What Do Credit Repair Companies Do?

credit repair companies

The best way to quickly raise your credit score is to dispute negative items on your credit report. Since there are three different credit bureaus, it can be time-consuming to sift through the information in your credit history and dispute items with each one. Plus, the average Joe doesn't typically understand the intricacies of the law in order to initiate the dispute.

Don’t have much time to review your credit report and go back and forth with three credit bureaus? Enlisting the help of a credit repair company can speed up the process of improving your credit score without any additional work falling on your shoulders. A credit repair company saves you time by taking a deep dive into your credit history and taking action on your behalf to boost your score.

The first step in the process involves the credit repair company taking a close look at your credit history to find negative items that can be removed based on the Fair Credit Reporting Act. Once these are identified, the second step is for the credit repair company to directly negotiate with the credit bureaus on your behalf to get the negative items removed from your report. 

Pros and Cons of Credit Repair Companies

pros and cons of credit repair companies

As with most financial decisions, it's important to weigh the pros and cons of using a credit repair company. While this service can take the burden off you, it can also be risky and costly. These are the pros and cons of using a credit repair company to boost your credit score. 


The biggest benefit of a credit repair company is that it can speed up the process of raising your credit score. You can take all the right steps to improve your credit, but it can still take months to notice a substantial change. Since reputable credit repair companies are familiar with the Fair Credit Act and have experience working with lenders and credit bureaus, they will be able to contest items on your report for a quick fix. Additionally, using a credit repair company can save you from the hassle and stress of doing the research and juggling communications with three different credit bureaus. 


According to the Balance, there is no official license or certification required to become a credit repair specialist which opens up the door for scams. Some credit repair companies promise to help you boost your score fast but don't get you the results they advertised. Even worse, some will ask for payment upfront and then don't offer much in return. Another consideration is that credit repair services are not free. The costs structure of credit removal companies is typically an initial set up fee plus a monthly payment. This means you'll need to budget for the service, with costs ranging from $60-$100 per month. 

How to Vet a Credit Repair Company

credit repair magnifying glass

If you considered the pros and cons and decided a credit repair service is right for you, it's important to choose a reputable company to avoid the risk of getting scammed. So how do you determine which ones are legit and which might take your money and run? You'll want to look for a credit repair specialist who is certified by a non-profit organization like the Credit Consultants Association or the Association for Financial Counseling & Planning Education. Unlike many credit repair software companies, these specialists will be reputable and more likely to get you real results. Once you have a list of companies narrowed down, make sure you read reviews on sites like the Better Business Bureau.

There are also some warning signs to watch out for when you evaluate a credit repair service. Be wary if the credit repair company asks for your payment upfront. The company shouldn't collect payment until they provide the service. According to Credit Karma, you should also watch out for red flags like a company that promises to remove accurate negative information from your reports, legally create a new credit identity for you, or guarantees improved credit. If you choose to move forward with using a credit repair company, keep documentation of all interactions with the business including your communication and transaction history. 

Alternative Ways to Boost Your Credit

checking credit score

The most common (and affordable) way to improve your credit score is to do it yourself. The two fastest ways to improve your score are to check for errors on your credit report and to decrease your credit utilization. In order to check your credit report for errors, take advantage of the free annual credit report you're eligible to receive and review it thoroughly for any errors. Once you identified the errors, contest them with the credit bureau through their online system. You can decrease your credit utilization by paying down your credit card balances and/or getting an increase to your credit limit. Both of these actions can significantly improve your score and even boost you into the next credit category. 

Another alternative is to utilize a free credit counseling service to help improve your credit or get you out of debt. Unlike credit repair companies, these services are usually free and are provided through a non-profit organization. A credit counseling agency will review your credit report and history in order to advise you and provide resources so you can take the steps needed to improve your financial situation. As with a credit repair company, ensure that the credit counseling agency is reputable and has good reviews. Although it may not be as quick as using a credit repair company, this route will help you avoid scams, and get you on the right track for improving your credit score for the long term.

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