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Even if you don’t spend long thinking about it, your credit score can have a huge impact on your everyday life. Every financial choice you make will be affected by your credit score, and if your credit score is low, then you may be unable to get some of the better deals around. Credit repair companies market themselves as the answer to your problems but what are they and how do they work?

A credit repair is a commercial business and will expect you to pay for their services. They say that they can help boost your credit score and advertise widely. Often, you will see adverts for credit repair agencies on websites aimed at helping people cope with debt or promoting financial advice. You may also hear credit repair companies being advertised on local radio or promoted on social media.

What Do Credit Repair Companies Do?

The most common service which credit repair companies offer is to check your credit files and getting any incorrect or inaccurate information taken off your record. They will approach each of the three of the UK’s largest credit agencies (Experian, Equifax, and TransUnion) on your behalf and request the data held about you. They will then check through the files and work out how to challenge any errors they find.

It is very difficult to come up with any hard facts about whether credit repair services work or not. There has never been any independent research done looking at customers’ starting credit scores, and how effective or ineffective the credit repair company was. It’s certainly true that if you have mistakes on your credit file which create a negative impression, removing them should improve your credit score. But this lack of hard evidence about the effectiveness of credit repair agencies makes it hard to work out whether you should use their services or not.

Is A Credit Repair Service Worth the Money?

Although credit repair companies may claim to have special expertise and know-how in rebuilding your credit score, the truth is that you can request your own credit reports and ask for errors to be corrected without paying a third party to do it for you. However, it’s also true that it can take a lot of emailing, making phone calls and sending letters to get errors corrected. Some people would prefer to have someone else take charge of the process and save them the hassle.

Credit Repair for People with Bad Credit History

We’ve explained how credit repair companies work by correcting wrong information or inaccuracies on your file. What credit repair companies cannot do is wipe information about missed payments, defaults, or County Court Judgements (CCJs) from your record, and you should be very sceptical of companies which say they can. If you know that your credit score is poor because you’ve defaulted in the past or taken out more credit than you can manage to pay back, then repairing past history is not a “quick-fix”.

The only way of repairing a poor track record which is down to poor money management in the past is to convince the credit referencing agencies that you’ve turned over a new leaf. Pay off old debts, show you can use credit responsibly, and make sure you are on the electoral roll. The good news is that even CCJs will drop off your credit file after six years, but the main point is that repairing your credit in these circumstances takes a while. It’s not instant as the credit repair agencies would make out. If your credit score is poor because of debts, seek advice from a debt charity rather than paying out more money to a credit repair company.