You might assume your credit report is correct, up-to-date, and factual. This assumption, however, might lead you to overlook errors that are decreasing your score. You can boost your score by following the official process for disputing errors on your own or employing a credit repair company to do so on your behalf.
You may wonder whether it makes more sense to hire a credit repair company to dispute mistakes on your credit report or whether this task was best undertaken on your own. Here’s more on how to decide whether you need credit repair.
What Kinds of Errors Can Credit Reports Contain?
Many Americans underestimate how many errors may be found on a credit report. Considering that each person has three reports from three separate bureaus, it’s easier to see how there’s an even more significant opportunity for error.
Consumer Finance breaks down these errors into four main types:
- Personal information: Mix-ups with accounts belonging to another person with a similar name, identity theft issues, etc.
- Account status: Closed accounts listed as still open, accounts mistakenly listed as late/delinquent, errors in payment dates, repeat debts showing up more than once.
- Balance errors: Accounts list the wrong balance or limits.
- Data management: Prior corrections still appear incorrect; accounts listed multiple times are attributed to different lenders.
As you can see, credit reports have much room for error. Even one or two of these mistakes on your reports may significantly reduce your score.
So, you know you want to dispute these errors, but now you’re pondering how to go about it.
Credit Repair Companies vs. Do-It-Yourself Error Dispute
What’s the difference between utilizing a credit repair service and disputing errors yourself?
The former may be more convenient, as the company will handle the dispute process, but it will cost a monthly subscription service rate or a fee per error. The latter will take a bit of research and elbow grease on your part, but it can be done for free.
Outsourcing the task of disputing credit report information does require trusting the company with which you work. A company like Lexington Law, operating for decades, is likely not a scam, but it does not mean every customer is happy with their outcomes.
The Lexington Law reviews and complaints from Bills.com show some past customers have been unhappy with aspects of this credit repair company, like allegedly charging one client hundreds of dollars for “nothing [she] couldn’t have done [her]self.” Another client complained that Lexington Law reportedly failed to follow up with credit bureaus after the initial dispute letters were sent.
While some consumer complaints are typical, learning more about prior clients’ experiences is wise to avoid making the same mistakes. The first step is learning more about what credit repair companies can and cannot do.
Many financial experts recommend disputing your credit report errors rather than paying a company’s fees to do the same thing you can do at home for free.
Avoiding Credit Repair Scams
Some credit repair companies are scams masquerading as legitimate companies. Steer clear of anyone trying to charge you fees upfront, which is illegal in the industry. Consider it a red flag if a company tells you not to contact credit reporting bureaus on your own or if they try to get you to lie or dispute legitimate information on your credit report.
Do you need credit repair? Probably not. After all, it’s entirely within your power to find and dispute errors on your credit reports at no cost.