Why You Should Pick A Credit Repair Company Over DIY Credit Repair
Your credit is a crucial factor in determining many of your future financial decisions. A few points in your credit score can make a world of difference when applying for a mortgage, an auto loan, or even a new job.
A good credit score is generally considered to be over 700, but the average American's credit score falls between 600 and 750 while nearly a third of people have a credit score under 600. Without a high score, any of your future financial choices can be greatly limited.
Credit repair is the process of finding inaccurate and unverifiable items on your credit report and disputing them with the three major credit bureaus: Experian, Equifax, and TransUnion. Removing these negative items can help you improve your credit score and set you on the right path to financial freedom.
Can I Fix My Credit On My Own?
The short answer is yes, you could. The Federal Trade Commission allows one free copy of your credit reports every year, which you can use to look for and dispute incorrect and unverifiable items on your own. Keep in mind that it takes time and inside knowledge to complete a successful dispute with bureaus without the leverage of licensed companies.
Credit repair companies help take away all that extra time and hassle DIY credit repair would cost you, plus they offer the added bonus of experience and knowing exactly what to look for.
If you need more convincing, here are a few other reasons why hiring a credit repair company is a good idea:
They Can Save You Time
You probably already have a busy schedule -- adding mornings and evenings pouring through your credit reports to find erroneous items is one more thing you will have to make time for.
Disputing items with credit bureaus means communicating with each of the three bureaus either through the mail, online, or over the phone. In addition to the workload, you lose time you could spend doing something you enjoy.
They Can Save You Money
Credit repair specialists are trained to spot commonly overlooked errors that are sometimes hard to catch, like mistakes in lender reports and identity theft. These experts know how to aggressively negotiate, dispute, and remove unverifiable items from your credit reports. They can also help you budget and create a payment plan to assist in paying off any heavy debts since loans can grow exponentially over time.
Reputable credit repair services not only fix your credit, but they educate you on the ins and outs of having good credit so you can better handle your own finances in the future. Many credit repair companies also offer personal finance tools, assistance with score tracking, and long-term credit monitoring.
They Know All The Legal Loopholes
Understanding the nuances of credit repair and its lingo can also be difficult. You need to learn about the three credit bureaus, what they do, how to dispute an item, how to effectively monitor your credit, how to spot computer and human errors, and how to identify fraud. While you can do this on your own, a credit repair specialist knows how to effectively take care of any situation that may arise. They can even stop collection agencies from reporting negative accounts.
In the case that a bureau continues to report a negative item after it is disputed several times, some credit repair companies can intervene with debt validation services to improve your credit.
The best credit repair companies offer additional services like identity protection, cease and desist letters to collection agencies, goodwill letters and interventions, debt settlement, negotiation consultations, and one-on-one consultations with a certified FICO® professional.
The Bottom Line
While you can pursue credit repair on your own, we recommend reaching out to one of our reputable credit repair services to help you get started on your credit repair journey.
What are some benefits of a good credit score?
A good credit score can help you with the following:
- Renting a house or apartment (without putting down a hefty deposit)
- Your mortgage payments will be lower
- You will receive a lower down payment when you purchase a cell phone
- Your utility bills will be lower
- Your insurance premiums depend on it
- Potential employers may look at your credit history to determine reliability
- It will be easier to qualify for loans
- You will receive lower rates on loans
- You will qualify for better credit cards
What factors make up my credit score?
Your FICO® is made up of five factors:
- Payment history: 35%
- Credit utilization: 30%
- Credit age: 15%
- New credit: 10%
- Types of credit: 10%
What negative items appear on my credit report?
Your credit reports can contain both positive and negative history. Items that negatively impact your credit include:
- Credit inquiries
- Late payments
- Loan defaults
- Past due payments
- Public records
- Tax liens
How can I improve my credit?
- Consider credit repair and contact a credit repair service
- Always pay your bills on time
- Deal with past due accounts
- Reduce your credit utilization
- Keep old credit accounts open
- Open new credit (but avoid applying for too much new credit)
- Monitor your credit
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