If you have poor credit, then applying for a mortgage or car loan may be difficult. If you’ve worked on improving your score but feel as though your hard work hasn’t paid off, you may be frustrated. This is where a credit repair company can make a big difference though. These companies are experts at reviewing credit reports and work to correct or remove items that are not accurate to bring up your score naturally.
If you’ve never worked with a credit repair company, then you likely want to know how they work. To get an idea of how these companies can help to raise your credit, you can get a better idea here.
What Credit Repair Companies Do
A credit repair company is a business that aids people in understanding their credit as well as repairing poor credit. They will analyze each person’s report and then dispute any inaccuracies with creditors or bureaus. They have an expert level of knowledge and can tackle any issues that may be more challenging for you to address on your own.
Their expertise is what makes the process of repairing credit easier for consumers. Credit repair companies understand what to look for in reports. They also know what process will fix most inaccuracies and are informed about what clients can request from creditors and credit bureaus.
Their work typically starts by reviewing the credit report. They can obtain a copy of the report from the three major credit bureaus: TransUnion, Equifax, and Experian. They will then review the report and develop a plan in order to fix any problems in the report as well as recommend other methods to raise your score.
Reviewing the Credit Report
When reviewing the report, the company wants to ensure that everything on the report is accurate. There may be errors such as:
- Duplicate accounts
- Incorrect inquiries
- Accounts that aren’t in your name
- Inaccurate accounts
Any of these inaccuracies can lower your credit score and falsely drive it down. Periodically reviewing your score will help you to catch any of these problems before they affect your score. Of course, you can do this on your own as well. However, a credit company will know where to look specifically and can help you save time and effort in the process.
Once they’ve compiled a list of errors in the report, the company will start to issue a credit challenge for every problem. By submitting a written dispute, you’re asking that the credit bureau reviews the accuracy of the information on the report.
The bureau will have to either correct or remove it if they can’t verify the information. Since this request may need to be completed in a certain way, it’s helpful to have a company on your side that knows how to manage correspondence with the companies and bureaus.
Recommend Credit Improvement Methods
This step is going to be different for every person. Depending on what factors have lowered your credit or made it difficult to raise, they will have suggestions on raising your credit that are tailored to your scenario. For example, it may be as simple as the company monitoring your score and then letting you know any opportunities to raise your score as they arise.
Some companies may not always offer credit monitoring for clients but instead provide credit counseling. This is a great asset to use. They’ll develop a personalized plan to help you work on credit scores with the goal of improving your score.
What is the Cost?
There isn’t a single cost associated with using a credit repair company. However, the cost that you incur is going to depend on the company you choose and the amount of service that you need. The payment can be a one-time flat rate if that’s all you need. There may also be a pricing structure that charges you for every inaccuracy on your report or a monthly payment for ongoing monitoring. However, you should be aware that credit repair companies cannot receive payment until they have delivered the promised results.
When you’re trying to raise your credit score, it may seem counterintuitive to incur another cost. However, you can end up saving a great deal of money after your credit score is improved. When you have poor credit, you may still be able to take out a loan. However, you’ll face high interest rates as well as fewer options when searching around for car loans, mortgages, and even personal loans. Since higher interest rates can end up costing you thousands of dollars in the future, it’s typically best to spend a little up front to save money in the future.
The overall benefits of raising your credit score are numerous. In general, lower interest rates are the primary benefit but you’ll enjoy other perks as well. When you’re shopping for loans or any type of financial assistance, having good credit will allow you to qualify for good options. For example, having a good credit score may allow you to qualify for a credit card that has perks you want or need. You can also enjoy approval for a high credit limits. This may be a benefit if you ever end up in an emergency situation where you need a higher credit limit. Finally, with a good credit score, you’ll have more negotiating power when it comes to your finances. You may be able to negotiate better loans in the future when you have a good score.
Get Started Early
When you want to raise your credit score, keep in mind that this process doesn’t occur overnight. The time it takes to see your credit repaired will depend based on the current score, your financial situation, and other factors. A few simple errors can be resolved within a month or two typically. However, if you have a situation that involves investigation on the credit bureau part or more complex problems, it may take several months. It’s best to start as early as possible if needed and try to remain patient through the process.