You might assume your credit report is correct, up-to-date, and completely factual. This assumption, however, might lead you to overlook errors that are actually decreasing your score. Disputing these errors — either by following the official process for disputing errors on your own or employing a credit repair company to do so on your behalf — can boost your score.
You may be wondering then whether it makes more sense to hire a credit repair company to dispute mistakes on your credit report or whether this is a task best undertaken on your own. Here’s more on how to decide whether you really need credit repair.
What Kinds of Errors Can Credit Reports Contain?
Many Americans underestimate how many errors may be found on a credit report. When you consider that each person has three reports from three separate bureaus, it’s easier to see how there’s an even greater 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 listing the wrong balance or limits.
- Data management: Prior corrections still appearing incorrect, accounts listed multiple times attributed to different lenders.
As you can see, there is quite a bit of room for error in the world of credit reports. Having even one or two of these mistakes on your reports may drag down your score quite a bit.
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 fees — either 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 left a complaint that Lexington Law allegedly failing to follow up with credit bureaus after the initial dispute letters were sent.
While some amount of consumer complaints are normal, it’s smart to find out more about the experiences of prior clients so you can avoid making the same mistakes. Learning more about what credit repair companies can and cannot do is the first step.
Many financial experts recommend disputing your own credit report errors rather than paying fees to a company to do essentially the same thing you can do at home, for free.
Avoiding Credit Repair Scams
Some credit repair companies are actually scams masquerading as legitimate companies. Steer clear of anyone trying to charge you fees upfront, something that 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 really need credit repair? Probably not. After all, it’s fully within your power to find and dispute errors on your credit reports at no cost to you.