A poor credit score reduces your chances of accessing low interest loans. People with poor credit end up paying high interest rates on loans, and mortgages. They also limited access to credit facilities. This means a poor credit report is not helpful in any way. Many people with poor credit yearn to improve their credit scores in other to access better credit facilities.
There are also many credit repair companies who will tell you how experienced they are in repairing bad credit. The truth is that you cannot trust all companies that claim that they can help you. The credit repair process is not a quick one. The process takes time and dedication. If you are reading this because you want to repair your credit, you are in the right place. We will offer you all the information you need to repair your credit.
Even though there are credit repair companies that you will need to pay for them to help you clear your bad credit, you can also do it yourself at a much lower cost. We will present to you the two options, and then you can make your choice. We will give you detailed steps on how to repair your poor credit yourself. We will also give you a list of credible credit repair companies that you can contact if you decide to go with the repair companies.
Credit Repair; How to do it Yourself
- Check your Credit Report
The first step to repairing your credit is to check your credit report. This is important since you will want to know what the report actually entails. Your credit report will include your personal information, personal statements, and credit report. If you have a negative account, it will show your missed payments if any, and collections. You should be able to identify all the information in your report. For instance, you should remember all the payments on your report. If you do not recognize some of them, they could be signs of fraudulent activities. Sometimes, people try to use the identity of others to secure credit for themselves. There are also times that you may find wrong information in your report. If you find any information you do not agree with, you should file a dispute.
- File a Dispute
You can file a dispute through your mobile device or online. You can submit a dispute by calling the phone number on your credit report. You will be connected to an agent. You can also write to the credit reporting company about the information you think is inaccurate. The letter should include your name and contact details. It should also clearly identify all entries with inaccurate information. You may request to remove or correct the erroneous information. You can add a copy of your credit report and indicate by underlining or circling the items in question. The credit reporting company will investigate the issues you have reported within the next 30 days. They will also forward the information you provide to the company that produced the information.
The organization will also investigate the claims and send a report back to the credit reporting company. If the report indicates that the information in your report is genuinely inaccurate, they will send a report to all the credit reporting companies in the country. These companies will then rectify the information on the files. The credit reporting company will give you a free copy of your credit report if the investigations result in a change in your report. If the investigations do not resolve the issues, you can ask the credit reporting company to attach the results to subsequent credit reports.
- Improve Your Payment History
Your payment history also contributes a lot to your FICO score. If you do not pay your debts on time, it will reduce your score. Your score is affected even more if you do not pay the debt at all. They also reflect on your public records and collections. If you want to improve your credit score, you should start making prompt payments. You should also try to pay back the debts you missed. This will positively impact your score.
- Improve Your Credit Utilization Rate
Before you improve your credit utilization rate, you should know your rate. Credit utilization rate is the total debt you owe compared to the total credit available. High credit utilization rate can negatively affect your credit score. Your rate should be below 30% for a positive impact. You can reduce your credit utilization rate by paying off your balances. You can also raise your credit limit on your account. You can also open a new credit account. Increasing your credit limit is easy, but it can be risky. Considering the fact that you want to reduce your debt, raising your credit limit can tempt you to borrow more. However, getting a new credit card also has its downsides. The enquiry will appear on your credit report, and it will briefly reduce your credit score.
- Pay Off Your Debts in Your Credit Accounts
It is also recommended that you pay off your debts if you have debts across numerous accounts. Even after paying off the debts, you should keep those accounts open. If your balances are low, your account will be in good standing. Maintaining accounts of good standing open will impact your report positively. You should, however, note that paying off your collections will not remove them from your report. Your collections will stay for another seven years. You can pay off your debts but do not consider paying off collections if the goal is to improve your credit report. However, there are instances in which it is beneficial to pay them off. You can pay them off if the collection company agrees to remove them from your report. You should talk to the company first. Some collection companies will agree to take them off while others will not. Your report can only improve if the collection company deletes the records from your report.
- New Credit
spending. You can adjust your lifestyle a little to make it easier for you to limit spending. It will take a lot of dedication to reduce your spending. You stop using your credit cards to cut spending. This does not mean you should close your credit card accounts; it only means you should avoid accumulating more debt. Some people hide their credit cards to prevent them from using it. Do not apply for a new credit card because you can. Some stores will even offer you discounts on new credit cards. However, you should only apply for it because you really need it. There is a limit to the number of credits you can take within a year. If you exceed that, it will affect your credit score. If possible, stay away from new credit facilities until you have cleared your debt. You should also note that making enquiries and mortgages and other substantial loan facilities can also affect your credit score. Getting new credit can delay your goal of improving your credit score. If you are overwhelmed by your debt, and you are finding it difficult to clear them, you should seek help from credit counselors. They can help you to manage your debt and eventually pay them off. Debt management plans may reflect on your credit report. It will be indicated on your credit history that you are paying off your debts through debt management plans. However, it will not negatively affect your score if you make prompt payments. You can also consolidate your debt to reduce the interest rates and make it easier for you to pay off your debt.
When you fix your account, your report may not be updated immediately. It can take more than 30 days for your report to be updated. When your report is updated, and your score improves, you should not go back to your old habits. It will be great if you can stick to good spending habits. This will help you to maintain a good credit score at all times. Good credit scores are beneficial when you want to access low interest loans. The fact that you can obtain low interest loans does not mean you should take more of these loans. Lenders may be willing to grant you such loans because you have good credit, but you should avoid them if you do not need the loan.
- The Credit Repair Act
This act protects customers from dishonest claims by credit repair companies. Some credit repair companies lie about what they can do for their clients. They make overly ambitious promises they cannot fulfill. The Credit Repair Act, enforced by the Federal Trade Commission asks credit repair companies to explain the following to their clients. They are expected to explain your legal rights and the services they offer to you. The explanation should be in writing. They are also expected to explain your right to cancel their services within the first three days if you are satisfied. They are not expected to charge you if you cancel within that period. The credit repair company is also expected to inform you about the duration of the process. They should tell you how long it will take to get results. The company should also inform you about the total cost of the service and guarantees if any.
Credit repair companies are also not expected to demand full payments until they complete the services required. They are also forbidden to suggest credit repair processes that will mislead credit reporting companies. In the same way, it is against the credit repair act for a credit reporting company to suggest that you alter your identity to improve your credit report.
You can also seek the services of credit repair companies. We have compiled the five best companies and the reasons why they stand out.
- Lexington Law Firm
This firm offers a free credit report for anyone who requests their services. They have over 14 years experience, and they offer 50% discount for military personnel, couples, and families. They also provide TransUnion credit monitoring for free. You do not require a contract, and you can cancel at any time. The setup process costs $14.99, and the company charges $89.95 monthly.
- Sky Blue Credit Repair
Sky Blue Credit Repair offers free credit report analysis to its clients. This company has been providing credit repair services for twenty-nine years now. You are also guaranteed 100% money back if the company is unable to repair his credit. The setup process costs $69, and you are also charged $69 monthly. There is a discount for couples. They are charged $99 for setup and $99 monthly. You are also not tied to any contract.
- The Credit People
This company also offers free credit consultation. You will get all your money back if the company does not repair your credit. The setup fee is relatively cheap. You are charged $19 for set up. There is a discount for a couple as well. They get 20% off their first payment. The monthly charge is $79. The company also charges an all-inclusive amount of $379 for a six month period.
- Ovation Credit Services
Ovation credit services offer free consultation services for their clients. You can also apply for the same-day service with this company. They will fast track the process and render you the service you require within 24 hours. Couples, military personnel, senior citizens, and families enjoy discounts on the services. The setup fee is $89, and you pay a monthly charge of $59 for their services. You do need to sign a contract with them so you can cancel your service request at any time.
You get to enjoy free consultation services with creditrepair.com. With their 21 years experience, this company can help you to repair your credit quickly. They also offer you TransUnion credit monitoring at no cost. You are not tied to any contract, and so you can opt out at any time. You pay only $14.99 for set up and a monthly cost of $99.95.