What Do Credit Repair Companies Do? Are credit repair services worth it?
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Your credit score plays a big role in your financial situation. A high credit rating means businesses can trust you, giving you easier access to lending services like mortgages and car loans. A low credit score, on the other hand, can mean declined loans, higher interest rates, and even difficulty finding a place to rent or buy a home. If your credit score could be improved, you may be wondering if hiring a credit repair company is worth it. As we continue our series on credit repair, we’ll answer that question for you!
What is Credit Repair?
Credit repair is the process of working with credit bureaus and creditors to remove inaccurate, incomplete, or unverifiable information from your credit report. When you have negative marks on your credit report, it can be difficult to get approved for a loan or even rent an apartment. Credit repair companies can help you dispute mistakes and negotiate with creditors to have them removed from your credit report, which can significantly improve your credit score. Here’s a video explaining the laws around deleting negative material and your credit report:
How are credit scores calculated?
Your credit score is a three-digit number that reflects your creditworthiness. It’s calculated based on information in your credit report, including your payment history, level of debt, length of your credit history, and new credit applications.
How does credit repair work?
Credit repair services improve your credit score in several ways. They first look for any inaccurate, incomplete or unverifiable information in your credit report and dispute it with the credit bureau. They also work hard to remove negative marks from your report, such as late payments, chargebacks, and collection accounts. Finally, they can help you build a positive credit history by adding positive information to your reports, such as on-time payments and long-term loans.
Is credit repair worth it?
The answer to this question depends on a few factors, like the quality of your credit score and the amount of work you’re willing to do on your own. Generally speaking, if you have a lot of negative marks on your credit report or your score is below 600, hiring a credit repair agency may be worth it. They can help you dispute errors and remove negative information from your reports, which can significantly improve your score. If you already have a good credit rating and just want to maintain it, it may be more cost effective to do the work yourself.
Either way, always remember that improving your credit score takes time and effort. But with the help of a credit repair counselor, you can get there faster!
Can I repair my credit myself?
Yes! You can do the credit repair work yourself by following these steps:
Check your credit report for errors – One of the best ways to improve your credit score is to make sure there are no errors in your credit report. Dispute any inaccurate or incomplete information with the office that reported it.
Reduce your level of debt – High levels of debt can lower your score. Pay off as much debt as possible and keep balances low on revolving accounts like credit cards.
Build a positive credit history – Add positive information to your credit file by making payments on time and keeping debt levels low.
What can credit repair companies do with your credit and credit score?
Credit repair companies work to improve your credit score by removing inaccurate or negative information from your credit file. This can lead to significant improvements in your score, making it easier for you to borrow money at lower interest rates. If your credit is below 600, hiring a credit repair company may be worth it. However, if you already have a good score, doing the work yourself may be more profitable. Remember: improving your credit score takes time and effort, but with professional help, you can get there faster!
Are Credit Repair Companies Worth It?
There is no easy answer when it comes to whether hiring a credit repair company is worth it. Ultimately, it depends on your particular situation and the severity of your credit score. If you have a lot of negative items on your credit report that need to be challenged, a credit repair company can be a big help. They can work to get these items removed, which will improve your score over time. If you already have a good credit rating and just want to maintain it, doing the work yourself may be more cost effective. However, no matter what, always remember that improving your credit score takes time and effort!
Tips on Hiring a Credit Repair Company to Avoid Credit Repair Scams
Credit repair scams are commonplace. So, when hiring for a credit repair service company, it is important that you be careful who to trust. To help you choose the right credit repair company and avoid falling victim to these scams, here are some tips you might want to keep in mind.
- Do your research and ask around for recommendations.
- Check if the company is licensed and insured. Legitimate credit repair organizations are licensed and insured. If they can’t prove them, then leave immediately.
- Make sure you fully understand the terms of the contract before signing anything.
- Get a copy of your credit report from each bureau before hiring a credit repair company so you can track their progress.
Here’s another webinar that fully covers the many signs of a scammer you should be aware of:
Next, in our credit repair series, we’ll cover the negatives in even more detail. We’ll give you the tools you need to tinker with your communication with the three major bureaus and fix your score yourself, so check out the Trussville Tribune next week for the final steps on your credit repair journey.