Personal finance management touches on several things. Part of what you need to do is to make sure you have a good credit rating. When most people realize that their credit score is not good, the first move is to engage credit repair companies. While they can help, they should not be your priority when seeking to turn around your bad rating.
Credit repair companies help you deal with your financial mess but is it really worth the consideration? Well, you might want to find out from this article. Here, you will find out everything that you need to know about imperfect credit scores and the best way out to take charge of your finances all over again.
Understanding Credit Repair Services
By definition, a credit repair service is a company that seeks to help you improve your credit rating. They offer their services at a fee to consumers that are willing to engage them. To help you, a credit repair company works with creditors and credit bureaus to process any errors in your credit report.
There is no problem working with these credit repair services. However, you must be wary of the swindles that may arise from these engagements. With proper research and due diligence, you can find a genuine service to use for your bad credit. If you do not want to go this route, then you could choose to do the work all by yourself. In the end, you will have saved a significant amount of money.
Help from Credit Repair Services
If you do not want the hassle of dealing with credit bureaus and your existing creditors, you can engage a credit repair company. Here is how they work:
They take it upon themselves to get rid of any negative marks as contained in your credit report. They do this by either:
- Challenging the credit report mistakes to lure the credit bureaus to erase them
- Asking your creditors to ratify the report details especially concerning the negative marks in the report. A creditor must provide proof to report these marks.
Can I do this on my own?
If you want to repair your bad credit report, the solution does not entirely rely on credit repair services. You can do this by yourself and avoid paying money to get help with bad credit reports. To get help through their services, these companies will charge you a monthly fee.
Credit repair services offer different packages for consumers to choose from. You can pick from basic to advanced options. The difference comes through the list of services offered and that includes credit score analysis and credit monitoring. Additionally, these services send cease and desist notifications to debt collectors based on the package you have picked.
Choosing a Credit Repair Service
If you have decided to go the way of credit repair services, it is important to proceed with caution. That way, you will not become an easy target for scammers due to your desperate situation. Beware of credit repair companies that:
- Promises instant results on your credit report
- Ask for upfront payments before any engagements
- Overlooks your legal rights and do not explain them to you
- Do not want you to directly contact the credit bureaus
- Asks for false information to fix your report
- Want to dispute information without carefully checking through your report
- Offer to give you a new identity and abandon your existing social security number
Do not become desperate to mend your credit score. Ask questions and round through the contract details before appending your signature on it. The company should give you clear answers. Otherwise, you should start doubting their ability to help you. Even after finding a genuine service, look at the costs and determine if it is worth the input.
Repair your credit on your own
Not unless you really need the help of experts, you can perfectly repair your credit report. In that case, you do not have to pay for such services if you are working on a budget. Furthermore, you are already in financial problems. Why pay to clean your records? Therefore, it is important to try it on your own before engaging in any credit repair service. Here is what to do:
Get the credit report from all credit bureaus.
You can get a free credit report from credit bureaus every year. Check with Equifax, Experian, and TransUnion. Afterward, read the report to understand why your credit rating is bad. In the process, you can identify mistakes affecting your score.
Raise an inquiry of the mistakes made.
Highlight areas with incorrect information and dispute the errors. The law allows you to file a dispute with each of the credit bureaus. Therefore, you can do this by sending a letter or applying for a dispute online. Once the dispute is approved, you will get a credit score rise.
Clear your current debts.
Pay off your credit card debt. There are many people owing much just like you. However, you will be off to a good ending if you start clearing those huge balances on your credit card. Ensure you do not borrow more than 30% of your available limit.
Start paying bills on time.
Make sure you make timely payments for your bills and existing debts. Building a new good history from this point onwards will positively affect your credit rating.
Keep monitoring your efforts.
As you work towards improving your credit, keep monitoring it. Find out ways to monitor your credit rating in order to stay focused on dealing with your poor records. That way, you can tell whether there is progress or not. Based on the outcome, you can make necessary adjustments to get out of this problem soon.
There is no shortcut to correcting your negative credit report. Even with the help of credit repair services, you must follow due procedure. Therefore, it is important to consider the option of doing the work on your own. If you cannot for whatever reason, pick a genuine service and check their charges!