It is annoying and tiring to have bad credit. They shut out opportunities such as qualifying for loans and credit cards, employment, and being able to secure a house or an apartment to live in. Cheaper cars can be found, but you have to remember that bad credit does restrict you and there are ways that you can repair your credit. However, in as much as credit repair is such an important aspect, then how much would it cost? Below is a general breakdown of what you should expect to pay for credit repair services.
DIY Credit Repair Costs
If you want to do it yourself and spend a little bit of your money, you can repair your credit for mere peanuts. Here are some of the most common DIY credit repair costs:
Credit monitoring service – this service costs $10-$40 per month.
It also involves goodwill letters – the cost of postage.
Credit report disputes – The consumer can directly dispute the credit bureaus for free
The major expense for DIY credit repair will be in getting a monthly credit monitoring service that lets you track your reports from all three credit bureaus – with Credit Karma for example – or a meager monthly fee with Experian. These services will enable you to check the reports you have on credit so that in case you find any error you correct it.
You can also write goodwill letters to your creditors requesting for removal of any late payments or any other negative remarks that may have been placed on your credit report. This method is most effective when the late payments were made due to some form of a crisis, for example, sickness, or loss of a job among others. Like any goodwill letter, goodwill letters cost nothing to attempt except for the price of a stamp in most cases.
Last but not least, you have the right to challenge and dispute any adverse information on your credit file with Equifax, Experian, and TransUnion for free. You can provide disputes online and by mail if you have such proof as a receipt, court papers, etc. The credit bureau, if asked, usually has thirty days to reply. Persistence pays off!
Credit Repair Company Costs
If you desire to have someone fix your credit score for you because you lack time to do it yourself, expect to part with some cash to professional credit repair companies. Some key costs include:
Subscription fees – $79-$400 and above
Monthly fees – $79 to 149 per month
Result fees – While some companies offer packages with an agreed number of fees for a certain score, some companies charge additional fees for results fees.
It is however important to note that, all credit repair firms demand between $79 and $400 for them to commence the process of repairing your credit score. This initial fee will include items such as: Creating your account and acquiring the credit reports from the three major bureaus.
Following that, you are supposed to pay a monthly subscription fee of somewhere between $79 and $149. Most of the leading credit repair companies include Lexington Law, Credit Saint, and The Credit People which charge at a slightly lower scale in this range. Interestingly, while you can expect more such personalized services from boutique agencies, those services come at a price.
In addition, some repair firms provide additional ‘performance fees’ based on targets like reaching particular score thresholds. For instance, a certain company may ask you to pay an additional 200 dollars if they assisted in increasing your score by a hundred. This is why the adage that” the devil is in the details” holds a lot of truth.
Any credit repair business organization or agency that is legal cannot promise or demand any kind of fees. Expenses may increase in cases where your claim is for a court to hear the disagreement. Other genuine agencies shall provide the necessary services under month-to-month contracts meaning that you can cancel at any time.
Other costs of credit improvement
In addition to the cost of credit repair, the main factors that determine credit score involve the payment of debts and ensuring timely payment of defaults. Expect to budget for:
Paying off collections – Most of the time, it would be just a percentage of the balance that is past due.
Current Account Receivables – Operating – All accounts – Balance of accounts outstanding, excluding those that are past due
Balances – Reduce credit card balances, maintaining credit utilization ratio at less than 30 percent.
The quicker one can clear a debt and resume paying his/her bills, the better the credit score is going to be later on. It is useful to know how much money is needed to do a particular job and what was done wrong with the money in the past so something is done instead of just getting annoyed.
The Cost of Revealing a Bad Credit
Last but not least, do not underestimate the fact that the lack of action towards your bad credit means accruing a very high price in the long run. A poor credit score can waste $100,000 or more on higher interest rates for big purchases like a home or car: A poor credit score can waste $100,000 or more on higher interest rates for big purchases like a home or car:
Auto loans - average interest of more than $7,000 for five years.
Mortgages: $60,000 of additional interest would be paid over 30 years.
Insurance premiums – $1000, which is 40% higher than the insurance premium paid by drivers with a perfect score.
Credit cards – Usually range from 17% to up, depending on type, while good credit rating is at 13%.
As with a price on peace of mind, no one can assign it a specific value but restoring poor credit is invaluable in being able to secure lower interest rates and other opportunities in life. Knowing each of these aspects helps you commit to making the necessary change, especially when comprehending the total cost of credit repair at the beginning.
Call now for expert credit repair services: (888) 803-7889
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