When searching for credit repair or restoration services, finding the right company and credit repair payment plan can be tricky. Sometimes consumers enter into a plan that doesn’t work for their budget or situation. Often times this can leave a sour taste in one’s mouth, but in this article, I would like to take the time and explain the 2 main credit repair payment models. Typically, credit repair companies operate on 1 of the 2 models but not both, although you do occasionally find companies that offer both options like Credit Wellness Solutions. Credit repair payment options can be on a monthly basis or a pay per deletion. Let’s explore the plans, the reasons behind them, the pro’s and con’s, and end with some final thoughts.
Options For Credit Repair Payment
Monthly – This is where you pay the credit repair company monthly payments for service.
Pay Per Delete – This is where you only pay the credit repair company for derogatory deletions.
Monthly Option For Credit Repair Payment
When signing a monthly credit repair payment contract, typically you will pay some sort of startup fee (typically called First Work). The startup fee usually is for a service during the onboarding process. The First Work can vary from company to company such as a detailed credit report audit, updating the credit bureaus with your personal information, inquiry disputes, etc. Then afterward you pay a monthly rate for services performed the prior month. As a word of caution, ensure the company is not taking advance fees as this violates federal law. Any fee you pay should be for work performed, so ensure you get details each month on the work that was done. Many credit repair companies favor the monthly model because it keeps residual income flowing to cover the costs of time invested in doing the work, supplies, postage, etc. This also enables the credit repair company to invest more time into their customers. Not only will the customer get better quality disputing, the customer will also get more value for the service. Honestly credit repair isn’t only about disputing derogatory items, it is about educating the consumer how to get the most out of their credit report by showing them how the credit system works, and how to manage credit. Also, credit building plays a key role in successful credit repair. All of this is time invested. Many credit repair company owners feel their time is valuable and deserves some compensation.
The Pro’s And Con’s Of Monthly Credit Repair Payment Plans
The Pro’s
- Typically Lower Startup Fees
- Fixed Payments So You Can Budget
- Typically Shorter Contracts
- Typically Lower Overall Cost
- Beneficial To Those With A Large Amount Of Derogatory Items
- Quality Disputing that can hold up in court if needed
- More time invested into customer especially with education
- More focused on leveraging options to increase the credit score other than through deletions.
The Con’s
- You May See A Month or 2 With Little Or No Results.
- Can Be Inconvenient If Unexpected Life Event Happens
- Chance of dealing with a scam artist (Always ensure you are charged for work already performed, NEVER PAY IN ADVANCE) Scammers make it harder for good reputable companies
Pay Per Delete Credit Repair Repair Payment Option
Like the monthly plan, you will begin your credit repair contract with a startup cost (First Work). Typically you will find these fees much higher. Of course on this model after the first work, you only pay the credit repair company when a derogatory item is deleted or improved (in some cases) from a credit report. The credit repair company typically
uses this model to attract more business, but in the long run, especially if they achieve many deletions, they make more money on this model than the monthly model. However, this model comes with its risks for the credit repair company that isn’t really worth discussing here, but regardless if done correctly you will have a happy client and be profitable.
The Pro’s And Con’s Of Pay Per Delete Credit Repair Payment Plans
The Pro’s
- Credit Repair Company does not get paid unless they get deletions
- May not have fees some months.
- Added peace of mind
- You can choose certain items you want to be worked on
- Less chance of dealing with a scam artist, companies that use the Pay Per Delete credit repair payment option tend to be reputable companies
The Con’s
- If the credit repair company achieves a lot of deletions, you could have a massive bill suddenly that you cannot pay
- Higher startup costs
- Credit repair company doesn’t invest as much time educating you about credit
- Longer contracts
- Not focused on credit score, only deletions
- Don’t focus on credit building as much
- In the end you typically pay more for your credit repair
- Simple and rushed disputing process that that don’t hold up in court (609 letters)
- Chance of running into a “Credit Sweeper” Avoid this scam at all cost! If someone is trying to get you to make false claims of Identity Theft run as fast as you can and report them to the authorities
Final Thoughts
Both credit repair payment options have their benefits and drawbacks. It’s ultimately up to you the route you want to go. As a word of caution, watch out for the scam artists that are out there. It is sad that others take advantage of good people who want to recover from past circumstances or mistakes. Scammers are not the majority of our
industry, in fact, you will find many companies are reputable and truly want to help people. After all, many who own credit repair companies have either had their own credit fixed, or have fixed their own credit. Enough about scams, I wrote an article about avoiding scams you can read here. Be sure you know confidently the terms and conditions of your credit repair contract before you sign up. Remember, on the monthly plan you are paying the credit repair company for their time and their work each month. For that work you get more value and your credit repair experience will be more complete, such as education, and credit repair. I will mention that although you are still paying each month regardless of deletions, It is my honest opinion you get more value for your money on the monthly plan. I will also mention the pay per deletion plan adds peace of mind for the client, even if they run the risk of a sudden big credit repair bill, or the fact pay per deletion can cost the client more in the long run, sometimes peace of mind is worth the risk.
The Credit Wellness Solutions Difference
At Credit Wellness Solutions, we have 2 core values we strongly believe in that separates us from all the rest. The first is always ensuring our clients have choice. We allow the client to choose many different aspects of our credit repair program. Like most companies, we require credit monitoring, but since our software works with Smart Credit, or My Score IQ, we let the client choose which service best meets their needs. We also give the client choice with our individual services such as (Inquiry Removal, Debt Collection Auditing, ETC). You can see a comprehensive list of all our services here. The second core value is compliance with laws and regulations. We have spent a lot of time and effort to ensure we exceed all industry regulatory requirements. Let’s go back to choice for just a moment. Because these next choices we offer our potential clients were crafted with exceeding compliance expectations in mind. First, we offer our clients the choice between monthly installments, or pay per delete. That’s right, we offer both! That is unheard of in our industry, and by offering this choice, I believe it will provide even more peace of mind. Also, we have all of our transactions processed by escrow companies. Currently, escrow is not a requirement as of yet, but many other financial service industries are now required to use escrow services. We wanted to stay ahead of the game and ensure we are compliant now. Even with escrow, we offer choices for the consumer in North Carolina. Clients in North Carolina can choose between Escrow.com or Credzu. Out of state clients will need to use Credzu. I’ll do another post about escrow for credit repair soon, but in short, I don’t get paid unless I do my work. Stay tuned to our blog as we will have many more posts coming soon!
