If you've noticed some mistakes on your credit report that are impacting your credit score, you can either resolve the issues yourself or get help from a credit repair agency. Getting professional assistance can sometimes cost up to $1,000. However, if you can remove any incorrect black marks from your file, the positive impacts on your credit score could be worth the cost.
You can use this guide to understand what will impact the cost, discover the benefits and get a free copy of your credit report.
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How much will it cost to repair my credit history?
Costs of credit repair, sometimes called 'credit fix' or 'credit wash', vary between credit repair providers and may depend on the listings that need to be removed. Generally, you will need to pay an initial consultation fee which can cost up to a few hundred dollars. There will then be a fee charged for each listing the company successful removes. This varies as well but is also a couple of hundred dollars. According to ASIC, some listings can cost as much as $1,000 to repair.
Please note that credit repair agencies can only remove incorrect listings. Make sure you get a full list of the fees and charges before you agree to pay for the initial consultation.
How can I repair my credit report for free?
If you find incorrect listings on your credit report, you can try to resolve them yourself for free. If you haven't already checked your credit report, you can order your free credit report with finder and start reviewing the listings on your report.
You can contact the credit reporting bureau that issued your report and ask them to remove the listing directly. If they refuse and you're sure that the listing is incorrect, you can contact an Ombudsman external dispute resolution service to help resolve your case. You can also contact a free and confidential financial counselling service or call the National Debt Helpline on 1800 007 007 for assistance.
What will impact the cost?
If you decide to get assistance from a credit repair company, the following factors will impact how much you'll pay:
- Defaults. The number of defaults you have on your credit file affect how much you have to spend. This is because credit repair companies in Australia charge a fee for each mark they remove. So, the higher the number of defaults, the higher the cost.
- Successful negotiations. After each successful negotiation that the credit repair company carries out to remove a negative listing, you'll be charged a fee to ensure the mark is successfully removed.
- Crossed or linked credit files. In case you're the victim of crossed or linked credit files because of how certain lenders submit credit data, you can expect a credit repair company to address this for a fee.
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What are the benefits of working with a credit repair company?
If you have legitimate incorrect listings on your credit file, here are some of the benefits of seeking the help of a credit repair company:
- Professional service. Credit repair companies work to repair credit reports for a living, so they know what to look for and who to get in touch with to remove incorrect, negative marks. This could prove more convenient and successful for you compared to if you were to repair it yourself.
- Improved credit. The ultimate goal of using a credit repair agency is to improve your credit history and score. This will help increase your chances of approval when applying for loans or lines of credit in the future.
- No need for collateral. If you apply for a loan while you have bad credit history, you may need to provide collateral to get approval. If you remove any incorrect black marks from your file, you may no longer need to meet this requirement and could receive a more competitive loan agreement.
While the costs will vary between different cardholders, credit repair does come at a cost. However, if you decide to get your credit repaired professionally, the benefits it will have on your finances will outweigh the fees in the long run. See our guide on how to repair your credit file for more tips and tricks for getting your finances back on track.