Need Help with Credit Repair?
Need Help with Credit Repair?
How Can We Help?
There have been a lot of commercials for credit repair services lately, and that has a lot of people wondering what exactly credit repair is. First, we need to understand how credit works.
There are a few different things that people can do to improve their credit. The two main strategies are to remove negative items from your credit report, and to build a better credit profile.
Credit is the act of providing a good or service, or payment for a good or service, with the expectation of being paid back later. Frequently we interact with credit in the form of credit cards, which allow people to make purchases that cost more than the cash they have on hand and then pay those purchases back over time.
Credit cards aren’t the only source of credit. Many stores will issue credit cards for their store only to offer financing for larger purchases, and companies that sell higher value goods like furniture stores also offer financing on their products. These stores use a person’s credit score to determine the interest rate and if they will offer credit to the individual at all.
An individual’s creditworthiness is measured by their credit score. A credit score is a composite score from 300-850 that lets creditors know how much of a risk a person represents for credit and loans. A higher score means that a person is more likely to pay back credit or loans offered.
Credit scores can go up or down based on a few factors. Paying your bills on time regularly will help your score go up, while missing a payment, being sent to collections, defaulting on loans, and being overextended on credit and loans can lower your score. Credit scores are also affected by the length of someone’s credit history, and by the mix of different types of accounts they have.
The Value of Credit Repair
Credit repair can help people out in a number of ways. Your credit score has a dramatic and outsized influence on your life. It is used in everything from decisions about loans and credit cards, applications to rent a new home, buying a new home, or buying a car, to getting hired for a job. As a result, having the best possible credit score will make life easier and better, while having a low credit score will make everything more expensive and difficult.
A bad credit score makes life more expensive because it means you’ll get higher interest rates on loans and credit, and may have to have a larger down payment for purchases than you would otherwise be required to have. As a result, you’ll pay more for the same purchase than someone with a better credit score.
Credit Repair Techniques
Removing Negative Items from a Credit Report
The fastest way to increase your credit score is to remove the entries on your credit report that are lowering your score. This can be done a couple of different ways. Federal law mandates that any item on a credit report has to be 100% accurate and verified to be true.
If you aren’t sure that a negative item on your credit report is accurate you can do two different things. The first is that you can dispute the item, which means you make an argument why it should not be held against you, or why the entry isn’t accurate. Disputes can be successful, but they can be tricky to pull off, as things can only be disputed for certain reasons.
Another common technique is to ask for verification that an entry is accurate. Companies aren’t always the best when it comes to paperwork, and if a company cannot prove that a negative entry on your report is accurate, then it must be removed. Unlike disputes, verification requests don’t need any particular foundation or basis.
Building Credit Profile
The other way to boost your credit score is to build your credit profile. This can be done by making regular on-time payments for your bills, but that takes years to have a large impact. Another strategy that some people use is to create a better mix of credit products on their report. Adding a new credit card will lower the percentage of the total credit you’re using. Additionally, it can diversify the mix of credit products you have, helping to boost your score.
Different Approaches to Credit Repair
Fixing your credit yourself is an option, as there is no specialized knowledge or skills required to do credit repair. This approach has its own pros and cons.
Cheapest option – only requires time
Lots of information and guides online
You have the best understanding of your credit
Can take lots of time – you may have to do lots of research on different approaches, trading off with other activities
Lack of familiarity with the credit industry can result in multiple attempts to get something removed before you get it right
Lots of writing, you will have to write out disputes and verification requests, or use a form letter which is generally less successful as a strategy.
Consumers can also hire a credit repair service to help them fix their credit. Credit repair services offer the same tools and techniques that individuals have access to. They have a few pros and cons of their own.