Credit repair is possible in a number of cases, but are you aware of the costs involved?
If you suffer from poor credit history, credit repair can be a worthwhile way to improve your credit rating in the event that you’d like to apply for another kind of credit or even a new job in the future. Both having a bad credit history and repairing it comes at a cost, though. There are a few things you’ll need to consider before you try to tackle your credit repair. As there are a lot of steps involved, seeking professional help could be a valuable idea. Here we discuss your options and explain how much it will cost.
How much will it cost to repair my credit history?
Living with bad credit places many restrictions on your life, so the number people with bad credit turning to credit repair companies comes as no surprise. If you’ve considered seeking such a service, you may know that they don’t usually come cheap. The cost of your credit repair will be determined by the credit repair company and will largely depend on the state your file is in. The complexity of your case also has an obvious bearing on the cost, as this directly affects the time and effort that the company will have to put in to achieve desired results.
Don’t expect a credit repair company to impart credit counselling, simply because their main aim is to get credit reporting bodies to remove negative marks from your credit file.
What will impact the cost?
When it comes to pricing, credit repair companies function like most other businesses, and charge their clients differently based on individual requirements. Factors that impact costing include the following:
- Defaults. The defaults you have on your credit file have an effect on how much you have to spend. This is because credit repair companies in Australia charge a fee for each mark they work in removing. 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.
- Court judgements. Court judgements can have a considerable effect on your ability to get credit, and a credit repair company, for a price, can work in removing the same from your credit file.
- 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 aspect, again, for a fee.
Can I repair my own credit file?
Repairing your credit file on your own is possible, but bear in mind that entire process could take weeks, and would involve getting in contact with a number of creditors individually. It can also be a complex and confusing process, so seeking the help of a professional may ensure a more thorough clean up of your credit file and better results.
Credit repair costs are normally high because the best* results require reliable and professional assistance. Unlike most credit card holders, these credit repair professionals have the required training to investigate defaults, contact creditors and remove negative marks from your file.
While opting for professional assist will come at a cost, it could be worth your while if they can help clean up your credit file properly. On your own, you might save money, but you might not have the same positive results that could help repair your history and get your finances in control.
If you're not sure where to start, order a copy of your credit score for free to determine how healthy your credit file is and how much work you need to do.
What are the benefits of working with a credit repair company?
Choosing a good credit repair company is important, and as long as you’re working with a company you can depend on, you can look forward to the following benefits:
- Professional service. Credit repair companies work to repair people’s credit files for a living, so they know just what to look for and who to get in touch with to remove negative marks. Their professional experience is more likely to produce a thorough result than if you were to attempt to repair it yourself.
- Worth the cost. While you’ll have to pay some money to a credit repair company, you’ll probably end up paying more financially if you suffer from poor credit and are unable to receive approval for loans in the future.
- No need for collateral. Applying for a loan with bad credit history might require that you provide some kind of collateral, and when a credit repair company is through fixing your credit file, you no longer have to worry about this requirement.
- Access to credit. In some scenarios, people might not qualify for any kind of credit owing to what’s on their credit files, and repairing your credit file in such a situation opens up borrowing doors for you once again.
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 to 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.
Frequently asked questions
Who has my credit file?
Credit reporting bodies like Equifax, Dunn & Bradstreet, and Experian maintain credit files in Australia. They make them available to creditors upon request.
What does improving my credit rating entail?
The process requires going through your credit file and looking for negative marks. The next step is working on removing these marks.
Can I pay money to a credit reporting body so it removes negative marks?
No, this is not a possibility. Unless the negative marks are false, you won't be able to get those removed.