How Credit Repair Works

Posted on 30 December 2018 (0)

It’s no secret that personal debt has been climbing for some time. With student loans for expensive college degrees, tempting credit card offers showing up in the mailbox, and unforeseen market recessions, you can be deep in debt before you know it.
Once you’re in the debt hole it seems almost impossible to get out… and before you know it your credit score is painfully low. If you are one of the many who are dealing with credit problems, you may be considering one of the many credit repair services as a way to get your credit score back up
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You can’t be too informed when it comes to choosing a credit repair plan. There are many legitimate credit repair agencies, but there are also some out there who make big promises and don’t deliver. These criminal (or close to it) credit repair companies will leave you worse off than you were before, so make sure to do your research before agreeing to anything.

Credit Repair Through Education

Ideally you’ll want to get your credit score back up as quickly as possible, and have a plan in place to avoid falling back into the debt hole in the future. But beware of credit repair agencies who offer a quick turnaround. Credit repair takes time, and there is no magic formula that will turn your credit score around in an instant.
There are several different types of credit help including debt negotiation, loans for debt consolidation, budgeting advice, and credit counseling.
The best repair plan will not only help you avoid declaring bankruptcy and get caught up with your bills and expenses, but will also educate you on how to avoid similar problems in the future.

Legitimate Types of Credit Repair

Debt negotiation is a way of working out a plan with your creditors where you only have to pay a portion of your original debt in an agreed upon timeframe.
Debt consolidation loans are a way of getting money to pay off your various debts together and then having one single loan payment, instead of having several different payments every month. Budgeting advice and assistance services will help educate you in order to get control of your spending habits and teach you how to budget properly. Another aforementioned service is called credit counseling, which provides assistance with repayment of your debts and budgeting as well as easy ways to bring your credit score up while avoiding additional loans.

Sidestepping Credit Repair Scams

Unfortunately, there will always be people out there looking to take advantage of those who are in need of help.
Beware of companies or individuals who offer instant or “next day” results, as well as those that offer to create a new credit report for you. In many instances when they create a “new” report for you all they are doing is creating a business tax ID number, which, if used, can lead you into legal troubles.
Remember that repairing your credit will invariably take time, and if a company is promising you an easy fix, it is probably too good to be true.

Repairing Your Credit On Your Own

There is always the possibility of repairing your credit without the assistance of a service. Start by paying off any debts you currently have, while opening new lines of credit that you make sure to pay on time. You can learn what is hurting your credit by getting your credit report from a trusted company. It may take years to clear all of the negative reports on your credit, but as long as you work to pay off your debt and pay your bills and other lines of credit on time, your score will go up.

Demystifying Credit Repair Myths

Posted on 09 October 2018 (0)

The credit repair industry is surrounded by myths and misconceptions that arise from illegal practices. There are also impracticable credit repair time frames that affect what people think about the industry. With time, the myths have created damage to the industry and have left people wondering if the sector is reliable.  

Although there are some repair companies with lousy reputation because they are scam-driven, reliable companies still exist, and they are doing the best they can to demystify the myths to restore the status of the industry.

Potential customers in search of reliable credit repair companies should be aware of these popular myths.

Myth # 1: The Credit Repair Industry is Illegal

This could not be further than the truth. There are many legitimate credit repair companies in operation today, and they would not be able to function if the services they offer are illegitimate. Secondly, the process that the companies follow is enshrined in law. For example, they strive to dispute the items that make your credit score drop, something that you can legally do on your own. The reason most people engage the professional services is that it is more efficient that when you are working on your own.

Myth #2:  The results are the same if you repair your credit on your own

This is a prevalent belief, but it is skewed. If you compete against a well-established credit company as an individual, the chances are that you will lose the battle. The methods used in the process of repairing your credit score are more efficient when applied by a company than when you handle the process individually.

You will save the money you might have paid for the services, but you will lose in time and energy.  It is more useful to use the services of a company than when you do it on your own. You are better placed if you use a company with a money-back guarantee.

Myth #3: Engaging professionals is a guarantee your score will raise

Although the purpose of the credit repair industry is to help you improve your scores, it is not always a guarantee that your score will increase. It is the same if you try to repair the score on your own. The process of rebuilding credit comes with a certain extent of unknown risk.

The company you hire will do its best in disputing errors that can improve your score, but it cannot guarantee that every dispute will successfully raise your score. Stay wary of any company, individual or service that promises to improve your credit score.

Conclusion

Bad credit rating is a problem that affects many individuals. It curtails your borrowing capacity and limits the amount of financing that you can get. Trying to restore your credit score can be a tiresome process, and this is why credit repair companies are crucial. They strive to legally represent you in the process while saving you time and energy.  

Many myths surround the industry. By mystifying them, you will realize how vital the industry is, and you will have no reservations using the services.