Article Contributed by: Money Magazine
Good credit is the key to reaching certain life milestones such as leasing a car, taking out an important loan, or buying your first home. Perhaps you were denied a loan you really needed, or you’re having a hard time locking in a low-interest rate on your mortgage. With bad credit, achieving these things becomes a lot more difficult. You might be thinking, does credit repair actually work?
Getting your credit back on track can seem hard at first, but there is a way forward with the help of a credit repair company.
Most lenders will check out your FICO credit score before approving anything. FICO uses the three major credit reporting bureaus – Experian, Equifax, and TransUnion – to give you a score for each one of them. Online, you’re going to find endless websites offering you a free credit score, but be advised: lots of these sites use a different model than FICO. So the numbers that might pop up online aren’t necessarily the ones your potential lender will see.
If you would like to learn more about what makes your credit score go up and down check out this article with infographic: What Makes Your Credit Score Go Up and Down
Are you curious what you need your credit score to be to buy a house: What Credit Score You Need To Buy A House
What is Credit Repair?
What credit repair does is find a way to remove negative items from your credit history.
Most of these items are removed on the basis of their inaccuracy. These items are one of the reasons your score is low.
The best credit repair companies will get to work on your behalf so all those inaccurate items are removed as soon as possible. The process involves sending letters via traditional post as well as speaking directly to creditors.
The Ins and Outs of Credit Repair
You need to be patient with the process because it can be slow.
Just know that you’re contributing to a financially healthy future, so it is worth the wait.
Yes, you will have to make a small investment, but it’s nothing compared to the amount you will save over the years once your credit is properly repaired.
With a decent credit score, you’re bound to save upwards of $50,000 in interest rates during the life of a mortgage. A 2% increase in your APR may not seem like much but spread out over thirty years, it will add up to a considerable amount of money.
How Credit Takes a Plunge
A lot of people are surprised to find that their credit score has taken a dive.
So many factors can weigh down your credit and not all of them are your fault. Millions of Americans have been victims of identity theft.
Getting access to your personal information enables bad actors to negatively affect your credit. The saddest part is you probably won’t notice until after the damage is done.
Late payments will always affect your credit score, mainly because they make you look like a risk to creditors.
Also, taking out too many credit cards lowers your score. Having credit is a good thing, but only if you keep your cards below 30% utilization.
The Right Credit Repair Company For You
Like any kind of service, the best credit repair company is going to be the one that does the work required to meet your particular needs.
There are many points to consider before signing up with a company, including your budget.
Take a close look at what they’re offering and read all the fine print. The last thing you want is to pay for products or services you don’t need at this time.
Read up on the company’s reputation, whether through reviews or ratings. Keep in mind, that most reviews in this industry are motivated by negative experiences, so take everything with a grain of salt.
And lastly, their cancellation policy. Can you get out easily? Will they charge you some sort of fee if you decide you no longer require their services?
Gather all the facts so you can make a well-informed decision.
The Madrona Group would suggest that you talk with one of our team lenders and take their advice on which company to use. We have seen many clients take their advice and watch their credit score increase in a short amount of time.
Boost Your Score: Does Credit Repair Actually Work Conclusion
With successful credit repair, you will see an improved credit score and continue to reap the benefits for years to come.
Kind of like playing the long game. So get started as soon as possible. A few smart moves now may result in a wealth of benefits in the future.
To read more on the topic make sure to visit Money’s Best Credit Repair Companies for 2021.