I get asked a lot about Credit Repair. Recently I was talking with a friend that needed to purchase a car because his old one died. Even though his credit score was really low there were places that would give him a loan but the interest rate was almost 30%. He eventually got enough money put aside that he was able to pay cash for a car. Good decision. The point is a bad credit score can cost you a lot of money and it can keep you from being able to make necessary financial decisions. When you have bad credit it is almost impossible to get a loan for anything. You will not be able to get credit cards, buy a home, a car, or get credit for anything you might need. In most cases, if someone does extend you a line of credit then your interest rate is very high. When you are given a high interest rate then you are almost paying double for the initial line of credit. Bad credit can hold you back from achieving major life goals such as buying a hose or even retiring.
Can I fix my Credit myself?
If you have seen Shawshank Redemption where Andy Dufresne keeps writing letters to get funding for the Library that is what you need to do to get your credit cleaned up. You can do it, you have to be persistent. If you know that you’re not that disciplined or you find that there is a lot of emotion around your credit you can turn to a credit repair company.
There are companies that can help
Do your research to find a reputable company. There are many deceitful credit repair companies. Look for the affiliations of the firm you are considering. All ethical credit repair businesses will be eager to provide you with their references on request. These are some important issues you should check out in order to steer clear of companies that are not reputable.
If you have not stopped the bleeding it may not be worth it to turn to a credit repair company. The first thing that needs to happen is you need to get control of your finances. There are not for profits that will work with you to pay off your debts. What they do is allow you to make one payment to them and they disperse it to the companies you owe. There are pros and cons to this. For some it can be extremely advantageous. I will write a separate article about this.
If you have poor credit because of errors on your credit reports, maybe there’s something that is decades old, maybe there’s an item that is showing multiple times. It seems harsh to have to paying higher interest rates on a mortgage, car loan or credit card because the credit reporting agencies have bad data.
Under the Fair Credit Reporting Act, you’re entitled to an accurate credit report and the ability to dispute any errors you find. You can get free copies of your credit reports from each of the major credit reporting agencies once a year at AnnualCreditReport.com.
