Credit Repair 101: A Guide For New Customers

12 January 2016
 Categories: Finance & Money, Blog

Having bad credit can have a detrimental effect on your life without a doubt. If you can obtain a line of credit at all, you could be faced with higher interest rates and financing charges than usual. You may have a difficult time getting some forms of employment or even finding a place to live if the owner checks your credit history as part of the applicant screening process. Having access to a credit repair company to help you rebuild your financial reputation is an amazing convenience. However, there are a few things that you will need to know about rebuilding and repairing your credit score. 

Credit rebuilding can get pretty complicated. 

You may think that if you are mindful of your own credit, you can handle bringing up your score on your own. However, there is always a good reason to hire a professional who can help you do this and that is the basic fact that credit rebuilding can be extremely complicated. You may know the general things that can have an adverse affect on your overall rating, but the sheer volume of variables is scary. For example, different lenders handle reporting in different ways and plus, you can actually have three different credit scores because there are three primary scoring agencies

You should be educated about what the credit repair company intends to do. 

Even though most credit repair companies will work quite efficiently to hold up their end of the deal and boost your credit score, it is always best to enter into a financial interaction educated. When you initially sign a contract with a specific credit repair company, you should be looking for objects on the contract like

  1. the specific rate you will be charged for services and when these charges will be due
  2. an in-depth layout of the services that will be provided by the credit repair company
  3. an outline of how you can cancel services if you are not happy with progression
  4. a schedule or time frame that you should expect to receive services from the company

Doing your part to repair your own credit will remain important. 

Repairing your credit is no once-and-done thing and you cannot just hand over a contract with your signature and expect that everything will be taken care of on your behalf. While the credit repair company will do everything that they can to rebuild your credit score, they will still need your cooperation to make this happen. You should avoid specific actions that can negatively affect your score, such as:

  • closing revolving accounts preterm
  • applying for new credit cards or loans
  • stay on top of current payments and avoid being late

The credit repair company will be working as a financial adviser and in order to see the best possible outcome with credit-boosting efforts, it will be important that you follow guidance and advice to the letter.