In today’s world, good credit is becoming more and more important. Chances are, you’re familiar with the struggle of getting a loan or financing approval with poor credit. Even major retailer credit cards go through a credit check to see if you meet a minimum score before you can acquire it.
Your credit score will help you get more than just credit cards, though; you can also use it to get auto loans, mortgages, and determine interest rates for student loans. Today, even utility and insurance companies check your background and credit score to determine standard rates and deposit fees.
How Does Credit Repair and Debt Restoration Work?
If you have good credit, it’ll be easier to find financing with lower rates than if you had bad credit. With a poor credit score, you’re far more likely to have trouble getting financing and your rates will inevitably be higher.
There is good news, however: contrary to popular belief, you can improve your credit score no matter how bad it is. Of course, it will take time and patience, but restoring your credit will be worth it in the end.
Reviewing Your Report
Reviewing the information on your credit report is the first and most important step in repairing your credit score. You will need to obtain one (or all) of your reports from Equifax, TransUnion, or Experian. These reports can be obtained once per year.
Should I Review My Credit Report All at Once?
Whether you’re trying to repair your credit or simply maintaining it and keeping an eye on your credit report, it’s important to review your reports at least once per year. If you’re maintaining your report, we suggest staggering each report three months apart, so you can issue a complaint against any charges as fast as possible. If you’re trying to repair your credit, especially if you are looking to finance or get approved for a loan within the next few years, we suggest requesting all your reports at once. Requesting your reports at one time helps you eliminate any errors and nip any discrepancies in the bud before they become real problems.
Once you obtain your report, you’ll want to review your personal identification information to ensure accuracy. Incorrect information may lead to inaccurate or omitted reporting. Review trade lines, payment history, and inquiries to ensure all information is correct. To dispute incorrect information, contact the bureau or the creditor to have the information removed or edited.
It’s important to note that information that is negative, but accurate and verifiable cannot be removed. In many instances, however, your credit report will refresh itself every seven years, and bad credit history will begin to fall off; it’s up to you to replace it with a positive credit history.
Creating a Good Payment History
In credit repair, its necessary to establish a good payment history to increase your score. Lowering your balances will lower your utilization and immediately establish good credit.
If you’re strapped or on a tight budget, choose one debt to pay extra on while paying all other bills on time. This will help you pay off one sooner rather than staggering them all out and putting more strain on you financially.
Another option to help you create a good payment history is to take out a debt consolidation loan. Once you’re approved, these loans will help you pay your debt by consolidating everything into one bill. Debt consolidation loans typically have lower interest rates than when all your debts are kept separate so you can start putting a dent in the balance you owe rather than paying off the interest on top.
Is There Any Other Way?
Yes! There absolutely is another way to restore your credit. If the idea alone of tackling all the credit repair efforts by yourself is stressful, it may be worth your while to find a credit repair company who can do the job for you. These services will dispute trade lines and inquiries that may be unverifiable and incorrect.
It’s still important to make note of a few things before hiring the company of your choice, of course. First up, a credit repair service cannot legally do anything with your credit that you cannot do yourself, which means they are doing everything that you have at your disposal as well. However, a major benefit in subscribing to credit repair services is they often include credit counseling and credit monitoring in the price. This means you can monitor your credit without having to handle the process yourself, and credit counseling can help you learn best practices for your situation and get your budget under control.
Currently, we consider one of the best credit repair services listed to be Lexington Law. You can review our review of them under the reviews section of the website where we list the pros and cons of their services and what they offer.
If Lexington Law doesn’t offer what you need, you might check out some of our other credit repair reviews, or look online to find a credit repair company that’s best for your situation. Beware, however, when you’re looking for a new company: there are many scams out there in the industry so it’s important to do your research. While there are those who truly try to make a positive impact on the world around them, we’ve found many companies try to make unreasonable guarantees and claims on things they have no control over, making customers feel stuck in a subscription or purchase. It’s important to do your research and ensure the company of your choice will provide a long-term solution, rather than quick fix.