A person’s credit is one of the most important metrics to judge their financial wellbeing in today’s world. Your credit will affect many things, including if you can get a bank loan, be able to buy a car, or invest in real estate.
For that reason, credit repair is one of the best things you can invest in for your financial wellbeing and future. However, when you ask most people, “What is credit repair?” they may find it challenging to offer you an answer.
So, let’s take a look at what it entails.
Definition of Credit Repair
Credit repair is the process by which one seeks to improve their credit standing by removing negative entries from their credit report. Credit repair companies offer to do this for consumers for a fee.
While contacting a credit repair company is the option many people choose, there are many other ways to rebuild your credit — all of which you can do on your own — for free.
How Does Credit Repair Work?
With that said, credit repair can be time-consuming and require quite a bit of commitment. Hence, many people prefer contracting credit repair companies to do it for them. Virtually all the credit repair companies work in the same way and follow a similar process when repairing your credit.
The first and foremost thing you should note is that a credit repair company cannot do anything for you if all of the data in your credit reports is accurate. as confirmed by Lexington Law reviews. They cannot remove any truthful details submitted to credit reporting agencies. On the other hand, if there are any inaccuracies or errors in your credit details, the company can help you dispute them.
Every year, you are entitled to a free report by each of the three main credit reporting agencies, namely Experian, Equifax, and Transunion. A credit repair company will review your reports for any mistakes to dispute them. Hence, they can correct erroneous information or identify fraudulent activity that negatively affects your credit. They do so by sending requests to the credit reporting agencies to review disputed information on your credit report.
What Is The Cost of Credit Repair?
As you have probably guessed, a credit repair company will not do these things for free. Credit repair companies charge varying fees depending on various factors. The total amount you pay and how it is calculated will depend on the company you use. However, a rule to observe is that you should never pay a credit repair company until results are delivered.
Due to their efforts, the company may ask for a one-time fee for all their services or charge you based on every infraction stricken from your report. The initial cost can be as low as $10 or as high as $100. There may also be a monthly charge ranging from $30 to $150.
In conclusion, credit repair is vital for your financial wellbeing, especially if you have a poor credit rating. Now that you know the answer to ‘what is credit repair?’ you should improve your credit. However, you should look for other ways to repair your credit before hiring professionals.
It is important to remember credit repair companies can do nothing about accurate information on your credit reports. The only way to fix those is to clear up the problems they identify. This might mean settling old debts by paying them off or negotiating with the creditor for easier terms. Simply put, the best way to repair your credit in most cases is to pay your bills.