Is the negative information on your credit history barring you from accessing loans with better terms? Do the items on your credit reports indicate your accurate credit score? If you feel that they are inaccurate, it’s time for a credit repair to improve your credit. With good credit, you can easily access loans with affordable interest rates.
So what is credit repair?
If you suspect that there could be inaccurate information on your credit reports, you can file a dispute and have the information corrected.
Credit repair, therefore, is the process of disputing the inaccurate information on your reports that may cause your credit scores to deteriorate further.
These negative items may give you a credit standing and rating that’s far from your actual score.
What it entails
You’ll start your credit repair process by downloading your credit reports from annualcredit.com and carefully reviewing then to identify if there are potential errors and mistakes worth correcting.
If you notice any anomalies, you’ll have to gather the right documents that justify your claims and then draft dispute letters to the credit bureaus. Depending on how organized you are, this process may take a few hours.
If you are using a credit repair company, the process of collecting statements and documentation that’ll help prove your case will be expedited, so you get to fix your credit much faster.
Once you have submitted the disputes to the credit bureaus, the credit bureau has 30 days to contact creditors to challenge the negative items on your credit file.
Expect a response from the credit bureau about your inquiry after 30 days. There may be a lot of back and forth because they’ll need more information or documentation to either accept or reject your dispute.
The entire credit repair process may take 3 to 6 months depending on the magnitude of errors and anomalies that need to be corrected. It may take longer if you are doing it on your own than when you are using a credit repair service company.
The trick, however, is that if you choose to repair your credit on your own, keep working until you resolve the problem.
Benefits of a credit repair
It’s an undisputed fact that with bad credit, you may not get access to loans. If you do, you’ll only get loans with high interest rates and horrible terms.
A good credit score, on the other hand, gives you an upper hand when you are looking for a loan. Lenders view you as a responsible borrower and believe your delinquency level to be quite low.
A credit repair enables you to:
Have an accurate credit rating and eliminate negative information that may deteriorate your credit.
Get access to loans with better terms and affordable interest rates.
Get credit cards easily.
Tell-tale signs that you need to repair your credit
If you have never repaired your credit before, but suspect that you could be living in bad credit, below are some sure signs that you need a credit repair:
Credit card issuers keep increasing your interest rates
Any negative information on your credit reports will lead to creditors increasing rates. This is to cover the risk because to them, you are a high risk borrower, and there’s no guarantee that you’ll pay your loan.
If you need loans or credit cards with better interest rates, it’s time to fix your credit.
Your credit cards get closed without warning
It’s okay to have one credit card closed, but if all your card issuers are closing their accounts, chances are that there’s something wrong with your credit reports. You can call your card issuer to know what’s wrong. Repairing your credit may help you get a true and accurate credit standing.
A low credit score
A credit score below 650 is considered weak by many creditors. It’s also an indication that you need to repair your credit to keep it from deteriorating further.
Your credit card application keeps getting rejected
Before accepting your request for a credit card, most lenders perform credit checks. If there is negative information on your credit reports like issues with delayed payment of bills, a collection account, or a defaulted loan, chances are your application may be rejected.
If you keep getting rejected, you are entitled to a full report on the reason for the rejection, and you’ll need to fix your credit to be accepted.
Debt collection agencies keep hounding you
Usually, when creditors give up on trying to get you to pay your loan, they hand over your account to debt collectors. A debt collection account on your account will negatively affect your credit score.
If you keep receiving numerous calls from debt collectors, it’s time for a credit repair. You’ll have to pay off these collection accounts or correct them if they are inaccurate.
Nobody is willing to co-sign a loan for you
If you have bad credit, chances are you’ll not get approved for a loan from any lender. Friends and family may also be unwilling to co-sign a loan for you because you are considered a risky borrower. You’ll need a credit repair to allow you access loans with better terms.
Landlords keep turning you down
While some lenders may be lenient and will not put a lot of emphases on your credit, some will be hesitant in renting you their apartments if you have negative items on your credit file. One late payment could be excused, but if you are always late on paying your bills, it’s an indication that you are highly delinquent.
With such bad reports, you’ll need to fix your credit.
If you have overdue loans, foreclosure, high credit card balances or even collection accounts, chances you are living in bad credit.
With bad credit, you may not be approved for any loan product by lenders. If you do get approved for loans, however, you’ll have to contend with very high interest rates.
You could start by paying off these loans and making timely payments to help build your credit scores. If there are disputes and errors in your credit file, you need to dispute them and have them removed from your reports as they’ll deteriorate your scores further and affect your ratings.
Credit monitoring is therefore important, and if you don’t feel confident enough to do it on your own, you can enlist the help of a nonprofit making credit repair company for credit consultation, free credit repair, and a free credit report summary.