Credit Building > Are UK credit repair companies worth it?

Are UK credit repair companies worth it?

Wollit Team3 minute read · Updated 23rd July 2024

If you’ve ever searched online about improving your credit score, you may have come across an ad from a credit repair company.

These services claim to help remove negative items from your credit report and boost your score, but are they really worth the cost? Let's take a closer look.

What do credit repair companies do?

Credit repair companies in the UK usually offer the following services:

Getting your credit reports from Experian, Equifax and TransUnion (UK’s main credit reference agencies).
Spotting errors and mistakes that may be hurting your score.
Disputing these items with the credit reference agencies and your creditors on your behalf.
Adding "Notices of Correction" to your credit report to give context to lenders about these errors or about other negative marks on your report.
Monitoring your credit and following up to ensure errors stay off your file.

The idea is that by removing negative but inaccurate information, your credit score will improve, making it easier to get approved for loans, credit cards, mortgages and other financial products at better rates.

How much do credit repair services cost?

Credit repair companies in the UK generally charge a monthly fee, typically ranging from £50 to £149 per month. You may also pay an initial setup fee to begin the process.

Some companies offer tiered packages, with higher tiers including additional services like credit monitoring or access to your credit scores.

The process can take several months to a year, so you could end up paying hundreds or even thousands of pounds in total to the credit repair company.

Are credit repair companies legit?

While there are legitimate credit repair companies operating in the UK, the industry has also been plagued by quite a few scams. In 2023, the UK's Financial Conduct Authority (FCA) reached a £2.7 million settlement with major credit repair firms over misleading advertising claims.

When evaluating a credit repair company, watch out for red flags like:

Guarantees to improve your credit score. Nobody can guarantee this, not even credit reference agencies themselves.
Promises to remove accurate negative information. Not even credit reference agencies have this power – any dispute will almost always need an agreement from the lender or company that reported the negative mark on your credit file.
Demands for full payment upfront before providing services. To be fair, this should be a red flag with most services.
Lack of transparency about your rights.
Lack of details regarding what they can actually and legally do. As we mentioned, this is often less than what their ads might imply.

Also, before hiring a company, do your research, read online reviews, and check if they are authorised and regulated by the FCA.

When should I use a credit repair company?

Credit repair services do come with a few advantages:

Can help identify and dispute hard-to-spot errors on your credit report.
Can save time and hassle compared to doing it yourself.
And can offer ongoing monitoring to make sure that these errors stay off your file.

However, they also come with significant downsides:

They’re costly, with monthly fees that can quickly add up over time.
They can give you no actual guarantee of improving your credit score.
They can't remove negative information like late payments or defaults that’s accurately reported.
Finally, you can do all of these things by yourself, for free.

Here is how you can “repair” your own credit on your own, without paying a credit repair company:

Get your credit reports from Experian, Equifax and TransUnion. You can do it for free by requesting your statutory credit report or by signing up to a free trial with Experian CreditExpert and creating an account with ClearScore and Credit Karma.
See if anything looks odd. Look for things you don’t recognise or things that are not reported correctly – for example, an account that you closed but is still marked as open.
Dispute any incorrect information with the lenders and companies responsible for it.
Then get in touch with the credit reference agencies to let them know that you’re disputing specific negative entries.

In other words, credit repair services may be worth considering only if:

You have obvious errors on your credit report that you don't have time to dispute yourself, or you’re not confident you know how to do it.
You've tried disputing errors on your own but the credit reference agencies or your creditors aren't responding.

However, if your credit issues are due to negative but accurate information like late payments or defaults, credit repair won't do much to help.

In those cases, what you need to do is to let those negative items age off your report over time, and to build a history of timely credit repayments.

The good news is that now there are many apps that can help you build and improve your credit history. One such app is Wollit.

Wollit works by reporting a fixed-fee monthly subscription as a loan repayment to all credit reference agencies. This helps you build a history of timely debt repayments, which is the main factor that matters for your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report that shows lenders you pay your bills on time, helping you reduce the impact of a single negative entry in your overall credit file.