Bad credit also affects almost every aspect of one’s life since it breaks down their creditworthiness. You may face difficulties in borrowing loans, credit cards, mortgages, rentals, utilities, and employment among others. On the brighter side, there are ways that one can take to restore credit and regain good scores. Some opt to hire the services of a credit repair firm to assist in the credit exercise. However, is it financially beneficial for an individual to pay a company to improve their credit score? Here below, review the main advantages and disadvantages of credit repair companies so that you will be able to make the right decision in your case.
Advantages of Hiring the Services of a Credit Repair Firm
Convenience: The main benefits of hiring a credit repair company include the fact that the company handles everything on your behalf. They follow up with the credit bureaus, submit dispute letters, and manage time frames. This can be particularly advantageous when you do not know what is expected of you in credit repair or when you have no time.
Expertise: SMEs also have experience in credit reports and disputes because they have been involved in credit repair businesses. They are aware of the intricate credit reporting laws as well as comprehend which approaches normally work when attempting to delete negative info from your credit reports. It can be used to increase the probability of success in endeavors using the expertise.
Results: Credit repair companies are legitimate and they can help consumers notice a positive change in their credit score. Credit repair services assert that they can delete adverse information from 60% to 80% of all credit reports that pass through their hands thereby increasing customers’ credit scores by up to 100 points more.
Disadvantages of seeking the services of a credit repair company
Cost: This is another negative aspect that is worth mentioning, as credit repair companies are not cheap. It is common for them to have an upfront cost that ranges from $100 and above $200 with other monthly charges which amounts to $500 to $1,000 and more within 6-9 months of service delivery. While having a single account under dispute may not cost much, having several accounts under dispute can lead to much higher costs. First, these fees should be questioned whether the same outcome can be obtained on one’s own without having to pay the fees.
Scams: However, there are always those few bad apples who wish to con people through the credit repair business since people are always in need of ways to fix their credit scores when in financial problems. These scams might ask for a large amount as initial payment and after that do not follow through with their claims of fixing credit histories. Beware of the elements that appear too promising, and their performance does not match the promises they make.
Legal compliance: While there are legitimate credit repair firms that employ lawful credit repair strategies, a number of the firms attempt unlawful activities such as credit identity theft or asking the creditors for deletion of the current correct information on the credit reports. Not only do these tactics never work but engaging in them puts the person in a legal predicament. Ensure that any company you are choosing to hire for credit repair services complies with the credit repair laws.
Credit repair involves fixing errors on your credit report and improving credit scores without the help of professional credit repair companies.
If credit repair is possible on your own and without charge if you invest some time and effort then, it is necessary to calculate whether DIY is more cost-effective in your case.
Here is a brief overview of major steps you can take:
• It will also be helpful to check Equifax, Experian, and TransUnion credit reports for errors to challenge the bureaus.
• Contact and request good faith corrections by sending dispute letters to credit bureaus. In cases where it is possible, offer proof that warrants your decision to remove an item or content.
• Contact creditors to dispute and rectify the errors on your credit reports, ask for a settlement on your debts, or seek debt settlement.
• Reduce credit card utilization below 30% of the credit limits and clear up any negative marks such as collection accounts, and past due payments through effective repayment plans if necessary.
• It is advisable to become an authorized user on a credit card account in good standing to enhance the rating.
• Do not apply frequently for credit to avoid being issued many checking account credit reports.
It is therefore important to understand that as long as you want to achieve positive changes for your credit report, you can fix poor scores on your own given that you have a well-planned strategy, enough time, and the necessary perseverance. Before seeking credit repair help from a particular company, it is wise to reflect on the value that is supposed to be received through the service is worth the convenience and expertise.
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