Save Your Money Paying a credit repair company to fix your credit report is often a waste of money, as you can dispute credit report information yourself, free of charge. In any case, the information will only be deleted or modified if it is inaccurate. Having a good credit score is important. Without it, you may be denied low-interest loans and lines of credit, a job, a rent, and even an insurance policy.
If your credit report shows a history of debt problems or contains errors, you may consider using a repair service to “clean” it. However, before you pay, know how these companies work. In the vast majority of cases, hiring an external company will only waste your money. Legitimate credit repair companies can ensure that inaccurate information is removed from your credit reports so that it doesn't hurt your credit rating.
However, they can't do anything for you that you can't do for you if you're willing to put in the time and effort. A credit score is usually a time is money proposition. After all, if you have a poor credit score and are paying high interest rates on your debt, it can be a good investment to hire a professional to work efficiently to eliminate any mistakes that keep your credit score low. The faster your credit score increases, the faster you qualify for lower interest rates, which can save you hundreds of dollars each month.
The Credit Repair Organizations Act requires companies to provide you with a firm total of costs and an estimate of how long it will take to get results. Having a poor credit score can be a major obstacle when it comes to opening a new line of credit, whether it's a new credit card, car loan, or mortgage. If your score is affected by legitimate mistakes you made, those can only improve if you practice good credit hygiene, such as paying bills on time and using less than 30 percent of your available credit. However, if you hire a credit repair company to help you, you will have to pay fees, which can vary widely.
As the Federal Trade Commission explains, there is nothing a credit repair company can do for you that you can't do on your own. Typically, these companies offer to review your credit reports and address any negative elements they can with credit bureaus on your behalf. Credit repair services can increase your rating more quickly than you could on your own, potentially saving you money in the long run. Their primary role is to advise you on the credit repair process and provide you with ongoing support in the event of contesting inaccurate information.
It's also a good idea to go and repair credit with as much self-knowledge as possible so that you can understand a little bit what's going on with your report. The credit repair industry is full of companies, and it can be difficult to know which ones are legitimate and reputable. Finally, you must obtain new accounts or make some credit limit increase requests to increase your available credit. If you have bad credit, it may be time for you to repair your credit, there is no reason to wait when it comes to having better credit.
This can happen when creditors report misinformation to the credit bureau or if an identity thief takes out credit in the consumer's name.