How Do Credit Repair Companies Work–And Are They Worth it?

With interest rates rising, and inflation going up, I’ve had a lot of people asking for help with their credit scores. As I’ve written before, a good credit score can make the difference in a home loan, a car loan, or even getting a good apartment or job.

After a recent review of credit repair companies, I’ve had two persistent questions: what do they actually do; and are they worth it?

I’ll answer both of these questions, and don’t forget the FAQs at the bottom if you still need something cleared up.

How it Works

Credit Repair companies don’t do anything you and I aren’t able to do–they just do it faster and better than we could do on our own. Repair credit is like repairing a car. If you had unlimited time to learn how to do it, and buy the equipment and tools, you could probably repair your clunker.

But even then, there’s no guarantee you’d do it as well as a good mechanic.

Credit Repair companies help our credit in a multitude of ways, but I’ll sum them up here in three broad categories.


Nothing hurts your credit more than a charge-off, a repossession, or a foreclosure. And nothing hurts worse than when these things are on our credit erroneously. Perhaps someone stole your social security number, or applied for loans in your name. Or maybe the car was totalled and the car loan company mis-reported it.

In any case, credit repair companies have the apparatus to dispute these items in our credit history, and they have the people that know how to get results.

One company, Credit Saint, specializes in this area. They’re able to dispute multiple items, multiple times, and they have the backchannels and language that the lenders respond to.


Other than errors on our reports, sometimes we just need a little helping hand. Credit Repair Companies can work with you and learn your situation to determine if there are any payments you can get back in front of. Even better, they can work with the lender to help you get back on track, too.

One way is to use “Goodwill” letters. This is basically an appeal to the lender (credit card company, car loan company, etc.) that they should forgive missing or late payments in return for better payment performance from you, the consumer.

You or I could always make these pleas ourselves, but they’re more effective coming from a third party. Returning to my mechanic analogy, it’s like when you ask your boss to forgive you for running late because of your car, versus a call from a mechanic telling your boss, “No really, this car is broke.”


Not only can credit repair companies help resolve issues that are dragging your score down, but they will also help you monitor your credit score so that if someone tries to use your name again, you can limit or eliminate the damage.

This credit monitoring also takes the form of helping counsel you on how to prepare for upcoming mortgage or car loan applications, and help you balance which cards to pay off when, and by how much.

So Are They Worth It?

Now that you know most of what a credit repair company does, you have to ask yourself–are they worth it? In many cases I would say yes, they are, especially if you have big-ticket items that you need resolved or disputed.

The fact is, a credit repair company can work with lenders at a faster rate of speed, and to greater efficacy than you or I. Even when you have all the information, and even when you’re in the right, you can’t work round-the-clock like a repair company can, and you probably don’t have all the language that lenders respond to.

Another thing to keep in mind is the cost-benefit analysis. I recently wrote about how your credit score can mean a $200 difference in your monthly car payment. That’s a car payment that will be with you for years, versus a few months of paying a credit repair company to save you that money.

And don’t forget, every company I’ve reviewed has a money-back guarantee. So you can see for yourself what a credit repair company can do for you. And if they dont’ do it, you can get your money back.

Final Score

No one can tell another person what’s “affordable” to them. We all have different financial situations, and we all have different priorities. But for most people that are facing severe credit score issues, I do recommend hiring a professional company to help. There’s really no replacement for expertise.


Are Credit Repair Companies a Scam?

Not the ones I recommend, though there are fraudsters out there. Check out my article on how to avoid them, here.

Are Credit Repair Companies Legal?

Absolutely. Just make sure you’ve done your research. My website is a great place to start, as well as my individual reviews of the best companies.

Can I Repair My Credit On My Own?

Of course, and I have a great how-to piece describing exactly how to do it. But keep in mind that going it alone can take more time, and doesn’t guarantee results.

About the author Greg Lorenzo

Greg is a financial expert who has been advising his audience on loans for over 10 years. He has a wealth of knowledge and experience in the area, and he is passionate about helping people get the best possible deal on their loans. Greg is an expert in negotiating loans, and he has a proven track record of getting his clients the best possible terms. He is also a strong advocate for financial literacy, and he regularly gives workshops and seminars on the topic.

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