Updated: May 23
Your credit profile is the single most important determinant of your overall financial stability. A credit repair company can help you at times where your credit rating is at risk. Anyone of us can have credit problems. Therefore, the important thing is that you choose the right people to work with you on your credit repair. Choosing a good credit repair company can eventually help you regain and rebuild your finances as well as your overall credit profile.
Why is Your Credit Rating Important?
Your credit score can determine the success or failure of many of your major financial goals. Therefore, a strong credit score is the key to achieving your many financial goals. Your credit score can affect things such as your ability to buy a home, rent an apartment, get a car loan or even qualify for a credit card. A poor credit score can feel like a downward spiral when you can’t qualify for things that would help you rebuild your credit.
Your credit score is the foundation of your finances. Therefore, constantly keeping an eye on your credit score can ensure you are maintaining it. If for some reason, your current debt solutions don’t work and your credit rating is negatively impacted, then you need to think about credit repair more seriously.
What to Look for in a Credit Repair Company
When it comes to credit repair, it is always a good idea to choose a reputable organization to work with. Choosing the right company is a key determinant of your financial turnaround. There are many less than average debt relief agencies, that can do you more harm than good. When it comes to your credit repair, it is best to choose non-profit, approved credit counseling agencies. You’ll also want a firm that uses certified credit counselors, and that is accredited and licensed to perform its many services.
How do Credit Repair Companies Work?
When you have inaccuracies on your credit report, a credit repair company can help you understand and repair credit by thoroughly looking at your credit report and disputing such inaccuracies.
How Credit Repairs Work:
Deep Dive into Your Credit Report:
As part of the process, the credit repair companies first take a deeper look at your credit report for a detailed analysis. The companies will request your credit reports from the major credit reporting bureaus; Experian, TransUnion & Equifax. In this detailed review, the organization will work with you to identify any accounts that don’t belong to you, any duplicate accounts, inaccurate accounts, and other inaccuracies in your accounts in your credit report. Not identifying these errors can negatively impact your credit history and your credit score. Therefore, it is advised that you keep tabs on your credit report a few times a year. You are eligible for a free credit report from each of the credit bureaus. Utilizing these can help you avoid any major impact on your credit score.
Once you identify where the errors are, then you need to work closely with the credit reporting companies to resolve them. These organizations typically have more skill, experience, and expertise to resolve these cases. The credit repair companies will work with you to collect any documentation to support your dispute. Once they have everything, they will send them along to the three credit reporting agencies and work with them to figure out if the fraudulent items can be removed.
Credit scores are an indicator of a consumer’s ability to repay lenders. Having a good credit score is crucial to qualify for loans and credit cards. Many credit holders worry about low credit scores. While improving a credit score might take some time, it can be done. Once steps are taken towards credit repairs, credible organizations will continue to give you advice on how you can continue to work on improving your credit. Here are some steps you can take to work on improving credit.
Timely payments – Stay on top of their bills and pay them on time. This includes rent, utilities, phone bills, car loans, and student loans.
Keep credit card balances low – Credit utilization ratios impact a consumer’s credit score. The ratio is calculated by adding all credit card balances and dividing that amount by the total credit limit.
Get a higher limit – Getting a higher limit while keeping the balance the same minimizes a consumer’s credit utilization ratio.
Limit credit card applications – It is important to only apply for credit cards as needed. Unnecessary credit can not only tempt consumers to accumulate debt but can also create inquiries on their credit report.
Hold on to unused credit cards – Keeping unused credit cards can increase a consumer’s credit utilization ratio, which can help improve their credit score. It is a strategic move as long as there are no annual fees.
Check credit reports – Consumers need to check their credit report for any inaccuracies as they can harm their credit score. Errors on reports could bring their score down.
Leave old debts on the credit report – Old debt on a consumer’s report might help their score – as long as the payments were timely and completed.
Beware of Scams in Credit Repairs
Having to deal with credit report errors can be stressful. However, many organizations are falsely claiming the ability to repair your credit. Here are some signs to identify such scams.
1. The company says they will be able to remove reported information from your credit report that you know to be accurate.
2. If the company says they will provide you a 9-digit “CPN” (credit profile number) or “EIN” (employee identification number). This process is illegal and the numbers you will be given are most likely stolen social security numbers. By using a stolen number as your own, the scammers will have involved you in identity theft where you could face a fine and possibly prison.
3. The company tells you never to contact the reporting companies directly.
4. They neglect to tell you about your rights about obtaining a credit report and disputing inaccuracies from the FTC.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, has written this booklet to help explain how to build a better credit report. Click here to access it. Becoming knowledgeable about your credit is the best possible way to avoid any financial hassle.