Do credit repair services really work?

We all know the value of having a strong credit score. It opens up more options for you when you’re looking to borrow money and helps you to secure lower interest rates. Lenders will look at your credit record when assessing you for anything from payday loans and credit cards to overdrafts and mortgages.

It’s no surprise, then, that some companies have started to offer so-called credit repair services. Also known as credit restoration, credit score repair services claim to help customers improve their credit score by identifying and challenging errors and inaccuracies on their credit reports.

Let’s take a closer look at credit repair services, what they do, whether they’re worth the money, and what you can do to repair your credit score yourself.

In this guide:

• Why is your credit record important?
• What are credit repair services?
• How much do credit repair services cost?
• Are credit repair services legitimate?
• How to repair your credit yourself for free 
• Are credit repair services worth it?

Why is your credit record important?

Your credit record is an assessment of your creditworthiness. Creditors, such as credit card companies, mortgage providers, and online loan companies use your credit report to assess the level of risk involved in lending you money. A better report with a higher score can open the door to more credit options. For instance, it can help bring down the cost of borrowing, as lower interest rates are often offered to those with better credit records.

So, a healthy credit record is important when you’re applying for credit. If you’re trying to buy a house or a car, or even sign up for a mobile phone contract, you’ll rely on your credit score to get a good deal.

Your credit record is put together by the three main credit reference agencies (CRAs), who collect information from a variety of sources to create your credit report:

• Experian
• Equifax
• TransUnion

What are credit repair services?

Credit repair services are offered by companies that will identify and dispute inaccurate information and errors on your credit report for a fee.

These credit repair specialists can help some consumers, especially those with obvious errors on their reports and very little time to spend disputing these themselves. However, credit repair services may not always be able to improve your credit score. They also usually charge for actions you can take yourself for free.

How do credit score repair services work?

Credit repair services review credit reports from the main credit agencies and look for any details that may not be easy to prove, are outdated, or inaccurate. Credit restoration companies then dispute these with creditors and credit agencies to have the information removed from your report. If the error is removed, this can have a positive impact on your credit score.

However, credit score repair services can’t:

• Remove genuine credit report information
• Advise you to give false statements to CRAs to fix credit flags
• Advise you to change your identification to avert attention from your report
• Guarantee that they can fix your report

How much do credit repair services cost?

Credit repair companies tend to charge you monthly, and several months may pass before you find out whether they’ve been successful or not. Some credit repair companies offer a flat fee for every service, while others charge different amounts depending on the number of services you want to use.

Whichever option you take, you could end up paying a credit repair firm hundreds of pounds with no guarantee that your credit score will improve by the end of the process.

Are credit repair services legitimate?

Credit repair services can be legitimate, but there’s no evidence yet as to whether they work for most people or not. One of the issues that some people have with credit repair services is that they’re not offering any services that are not already available for free – providing that you're willing to do the legwork yourself.

In other words, you can dispute inaccuracies and ask them to be removed at any time, for free. However, it will take a bit of patience and effort on your part.

The credit restoration industry can sometimes use aggressive marketing techniques too. If you’re considering paying out for credit repair services, you should think carefully about the following:

• Are you likely to have unprovable, inaccurate information, or errors on your credit report?
• Are you prepared to pay for a service that may not guarantee credit improvements?

How to repair your credit score yourself for free

There are plenty of ways to help improve your credit score without involving credit report repair services. It might be wise to consider the steps below before considering paying out for specialist credit fixers:

1. Join the electoral register

You’ll be surprised what impact your electoral register status can have on your credit score. If you’re unsure whether you’re on the Electoral Roll, you can check through the Electoral Commission website.

Once you’re on the electoral register, creditors and credit agencies can reliably check that you are who you say you are, and that your address is valid. Without this line of verification, there's always the risk that your identity is fake, making you a much riskier candidate for lenders.

2. Maintain low credit utilisation

This involves using small, manageable amounts of credit to show you’re able to pay it off on time. If you have access to a line of credit, such as a credit card or a basic overdraft, using less than 30% of the credit available to you reflects better on your credit record. This is because it shows that you can manage your credit effectively.

Therefore, opting to have an overdraft facility could be a good option, even if you don’t need one. It can also help to pay your balances off early before your statement renews, or on the same day that you make a credit purchase. While this can help your credit rating, only take credit you can afford to repay and  avoid any negative marks on your credit report.

3. Review your credit report regularly and report any errors

It’s now really easy to view your credit report with the main CRAs, without paying for the privilege. Just sign up and you’ll get access to your score whenever you need to.

Taking the time to thoroughly check your report regularly will maximise your chances of spotting any irregularities that might need correcting or disputing. The quicker you can do this, the less time it can negatively impact your report.

4. Pay on time, every time

The most important thing you can do to protect your credit record is to prevent it from long-term damage. This means making every effort to repay on time over a significant period of time. Credit agencies are looking for evidence that you can responsibly handle debt and this simple rule is essential. Learn more about how long missed payments can stay on your credit report with our guide.

Are credit repair services worth it?

There are circumstances where using the services of a credit repair company could be helpful. For example, if there are clear discrepancies or inaccuracies on your report and you would prefer to offload the job of getting them removed. Being able to afford the cost, potentially amounting to several hundred pounds, is also a factor.

However, in most cases, you’re often better off keeping a close eye on your credit report and immediately reporting anything you feel is wrong or questionable. You can report any errors to the credit agency responsible for the report for free. Understanding your credit report yourself can help give you more financial confidence and responsibility too, which is always a benefit.

Explore more helpful resources

Discover more credit insights and money management tips on our helpful blog, including what happens if you don’t pay your phone bill and how to create long-term financial goals.

Remember, if you’re experiencing financial stress, worried about paying for priority bills, or you’re not sure how to fix a credit issue, help is always available.

Reach out to third-party help and support charities for free, confidential money and debt advice, including StepChange, Citizens Advice and MoneyHelper.