Credit repair services: are they worth it?

Having a good credit score is important for your financial wellbeing. A good credit score can help you get loans, favourable interest rates, and mortgage approval. For these reasons, it is understandable why people with ‘poor’ credit scores want to improve it as much and as quickly as possible. This has led to the rise of ‘credit repair’ services. 

What is credit repair? 

Credit repair is a third-party service offered by companies or individuals with the promise of improving your credit report and score by removing negative information from credit reports. Negative information can include things such as: missed or late payments, bankruptcies, and debts in collections.

Credit repair companies may dispute these negative items with credit on your behalf in order to have them removed from your credit profile. The aim is to improve your credit score so you look more favourable to lenders. 

Credit repair companies offer these services in exchange for a fee (this amount will vary between companies). 

Are credit repair companies legitimate?

If you are overwhelmed by your finances, it is understandable why you may look for support and assistance. 

Whilst some credit repair companies may be legitimate, it is advisable to be cautious of companies offering any promise to improve your credit report in exchange for a fee. As ever, you should be alert to fraud and scams. Many of these companies require payment before work is carried out and there is no guarantee that certain information will be able to be removed from your credit profile. Additionally, according to Experian, there are no reliable statistics available regarding the effectiveness of credit repair services.

Furthermore, improving your credit profile is something that is easily achievable on your own for FREE.

There is nothing credit repair agencies do that you can’t do yourself

All credit repair agencies do is contact credit bureaus to dispute items on your credit profile. This is something that is achievable for you to do without having to pay. 

You can access your credit profile via a Statutory Credit Report from a Credit Reference Agency. The main three being Experian, Equifax, and TransUnion. A Statutory Credit Report contains information that credit reference agencies hold about you and this information is what lenders use when they assess you for credit. The report is free to access.

You can also call your lenders and negotiate with them yourself. Be upfront and honest with your lender as they may be able to suggest a more suitable financial plan. 

Lastly, there are additional ways to improve your credit profile, which are outlined in our blog here. However, it is crucial to remember that patience is an important factor. It can take time to improve your credit and some negative information such as defaults are ‘wiped’ from your credit report after six years. If a lender can see you are taking steps to improve your credit profile, it will be looked upon favourably.

If you are experiencing financial difficulty or worry, you can contact free debt advice services such as StepChange, National Debtline or Citizen’s Advice for further support.

NestEgg is not a credit repair service. Our platform only provides services from responsible and ethical lenders who can help improve your financial resilience and future affordability. 

For more information and to see responsible and ethical lenders local to you, visit our platform here.