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Credit repair solutions: Credit repair companies vs. DIY credit repair

minute read

    If you have bad credit and you’re starting to notice the consequences — such as the inability to get ideal interest rates or approvals for loans — you may be wondering what solutions are available to you. To help you make the right decision, let’s go over some options for rebuilding your credit and how they work. Note that Chase does not offer credit repair services.

    In this article, we will discuss:

    • Credit repair vs. credit restoration
    • Tips on how to restore your credit
    • Paying to have your credit fixed
    • If credit repair companies are worth it
    • Improving credit yourself
    • Other ways to restore your credit

    Credit repair vs. credit restoration

    Credit repair is the process of restoring your credit score by evaluating your credit report and making some important financial adjustments. You can either do this by paying a reputable credit repair company or by do-it-yourself (DIY) credit repair. Note that if you decide to pay for credit repair services, your credit score will not magically change. These services typically examine your credit report to determine if there is any inaccurate information, and if so, reach out to the credit bureaus and have it removed.

    Credit restoration, on the other hand, has more to do with restoring lost or stolen credit cards and other sensitive information that could further harm your credit score. Regardless of how your credit score ranks, if fraud or other suspicious activity occurs, your score could be negatively impacted. Credit restoration aims to help re-balance and protect your credit score.

    Tips on how to repair your credit yourself

    Improving your credit after it’s been hurt can take time, patience and diligence. While you could pay a credit repair company to do the initial work for you, repairing your own credit is something you can do entirely on your own.

    One way to help understand the factors affecting your score and help improve your credit is by enrolling in Chase Credit Journey®, a free online tool where you gain access to helpful resources and information about your credit score. You can create a credit score improvement goal in which you’ll receive a personalized action plan provided by Experian™ to improve your credit score over time.

    With Credit Journey®, you can regularly check your credit score for free without worrying about harming it. You’ll also have the ability to enroll in credit monitoring and identity monitoring services, both of which help you stay proactive in protecting your credit score.

    Other tips to rebuild your credit include:

    • Strategize your debts — you may want to prioritize and strategize the best ways to pay off your debts. For example, you may consider balance transfers for high annual percentage rate (APR) balances. Note that sometimes these balance transfers come with a fee; always check your terms and conditions before making a transfer.
    • Make your payments on time consistently — payment history is a key factor when it comes to calculating your credit score, so make your payments on time as much as possible.
    • Lower your credit utilization ratio — this ratio is your total credit usage compared to your total available credit. Lowering your credit utilization ratio to about 30% or less may be a helpful way to improve your credit score.
    • Cut back on spending — another way to replenish your credit yourself is by cutting back on unnecessary expenditures. For example, freeze subscriptions you rarely use and instead allocate that monthly amount toward paying down debts or making your credit card payments on time to improve your payment history.

    Can you pay to have your credit fixed?

    There may be reputable credit repair companies that exist to help address issues with your credit, and you can pay for this service. However, be wary — these companies can't actually fix your credit, but they can help assist in removing incorrect information from credit reports, which may help improve your credit. Note: It's typical for credit repair services to charge a subscription fee, so be on the lookout for this when you sign up.

    Are credit repair companies worth it?

    Credit repair companies can help address inaccuracies on your credit report — but so can you, and for free! It may not be worth paying a repair company to do what you can do on your own. However, it could be worth it if you are challenged for time and want to hire a professional to look into your credit for potential inaccuracies.

    Other tips to repair your credit

    Whether you’re using a credit repair company or decide to go DIY, there are a few more considerations when it comes to repairing your credit. These include, but are not limited to:

    • Looking through your credit report for inaccurate information. Though rare, it’s possible that negative, inaccurate information in your report could be doing damage to your credit. Removing these inaccuracies can help improve your credit score. You can do this either by working with the credit repair company you’re paying for or by contacting the relevant credit bureau(s) that generated your report to dispute the inaccurate information.
    • Working with your lender to adjust current financial agreements to lighten your burden of debt, such as extending loan terms, refinancing your home and more.

    In summary

    You should feel empowered to take the steps you need in order to turn your credit score around. Whether you’re working with a credit repair company, lender, financial advisor or doing it on your own, you have the tools and resources available to help you improve your financial standing.

    DIY credit repair is possible with some time and patience. You may want to start small to avoid feeling too overwhelmed. Work your way towards larger goals over time. Remember, Credit Journey is a free tool you can use at your disposal to help set you up with an action plan to help you get to work on improving your credit score.

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