Pay Per Dispute Credit Repair Services
On the surface they seem like a good deal. Pay per dispute credit repair companies do not charge a monthly fee like the majority of credit repair services. Instead, they charge a fee for each negative item they are able to remove from your credit report. Typically this is around $20 per negative item.
Pay Per Dispute Credit Repair - The Catch: Part 1
Compared to other credit repair organizations that charge $50 or more per month, $20 per negative item seems like a good deal … until you do the math. Lexington Law, the leader in the credit report repair industry, clams an average of 10 deletions from consumer credit reports in the first 90 days of service. Their customers get this service at a flat monthly rate. A customer using a pay per dispute credit report repair service would be charged at least $200 for the same service.
Pay Per Dispute Credit Repair - The Catch - Part 2
Even $200 seems reasonable when compared to the benefits in the form of lower interest rates and other benefits of an improved credit score, but the $200 described above is still not an accurate number. Remember that there are three major reporting bureaus; Experian, Equifax and TransUnion. Also note that these three bureaus share their information so a negative item reported to one bureau will likely make its way onto all three credit reports. Going back to our math from above, a single deletion requires the removal of a negative item on each of the three credit reports and at $20 per negative item removed, you will be charged $60 per deletion. At a rate of 10 deletions in the first 90 days, you will be charged a full $600 in the first 90 days of signing up for the service.
Other Things to Watch Out For When Selecting a Credit Report Repair Agency
Along with pay per dispute pricing which tends to drastically understate the price you will pay for service, there are some other things to watch out for when looking for a credit report repair company.
- Huge upfront charges
A common credit report repair scam is to charge a large upfront fee for service and never deliver the expected results. Far more prevalent in the past than today, scammers would charge $500 or more for service and then disappear.
- Charges for service before they have been completed
Although practiced in many other industries such as cable television service, the Credit Repair Organizations Act forbids credit repair companies from accepting any payment for services until they have been completed. Any credit repair company who does so is non-compliant.
- Promised results
Any credit report repair company that promises to remove even one item from your credit report is in violation of industry regulations.
- Automatic dispute of all items on your report
Credit repair companies are required to only dispute the items that you believe are unverifiable, misleading, or inaccurate.
- Creation of a new credit identity
Some companies go so far as to create you a new credit record with the credit bureaus. This is a criminal act and could end up getting you in serious legal trouble.
