Your credit score says a lot about you and lenders will probably use it to determine whether to offer you a loan. When your scores are better, you will have better chances of credit approval at the best terms. Bad credit, on the other hand, will limit your opportunities and will cost you money. That is why thousands of people today are turning to credit repair companies to help fix errors in their credit and improve their FICO Scores.
Basically, there is no magical formula to improve credit score, because a negative but accurate information cannot be changed, but a good company can give your scores a deserved bump by fixing some errors on the reports. It is important to pick a reputable company because some companies out there have a bad rap of ripping off their customers by giving them false promises or by overcharging them. Here we have briefly reviewed some of the best credit repair companies in the industry. Lexington Law is the most reputable and respected companies in the industry and for good reasons. The good thing about this company is that it is actually a law firm specializing in credit law; therefore, so can be assured that they will improve credit score quickly since know the ins and outs of the credit reports. Lexington Law also provides benefits such as:
- Almost 27 years experience with over half a million clients to date
- An A rating from BBB and is on the cheaper end depending on the services. You will pay at least $99.95 initial fee, and this includes everything that comes along with credit repair plan
- Lexington Law won’t charge you a dime until they complete all the work they agreed to not to mention they have a comprehensive service network
SkyBlue is perhaps the most affordable credit repair option you will find. They have streamlined their services to offer a basic plan for only $59 initial payment, which is far cheaper than what the competitors are offering.
- SkyBlue will give you straightforward repair services and will include fixing errors on credit report as well as sending good faith to your lenders and find ways to get your score back to where it should be
- The company is also among the top credit repair companies, with an A+ rating from BBB and other review sites
- It’s probably the only company that will give you a full 90 days refund
- SkyBlue disputes up to 15 items in every 35 days making then the fastest working credit repair services available
Credit repair.com is the most well-rounded services you will find; with over 1.5 million items removed from their clients for the last 20 year of their operation. One of the main advantages of Credit repair.com is that they have a business relationship with the TransUnion; therefore, they can pull a credit score for you. Other than that, credit repair.com
- Offers 24/7 alerts and credit monitoring services
- Offer personalized dashboard and a credit score tracker
- The value of their services is definitely worth $99.95
Of course, there are other good credit repair services out there, but these three are so far the best and the most reputable in the industry.
How the Best Credit Repair Company can Help
If you will be hiring one of these companies, you need to know why they are receiving your money. Of course, you can fix items that make your FICO scores look bad on your own, but this will be time-consuming, and there are frustrating commitments you will have to make. The credit repair company will help you save time and will use their expertise to deal with your score in the best way possible. They will obtain a credit report from credit bureaus; identify the items in your report that can be disputed. They will also file credit disputes on your behalf and ensure that creditors and bureaus remove errors on credit report as soon as possible.
But What to do if I am ALREADY in Debt?
Sometimes, you may fall into the unfortunate situation of being in debt. Whether you have used your credit cards to make purchases that were too large or you weren’t making your payments in a timely manner, debt can happen to just about anyone. If you are in that situation, you could certainly benefit from credit repair services and debt consolidation. It can help you to learn about how to be wiser with your spending and makes it easier to pay off your debt by taking all of your credit card debts and making them into one. In addition, credit repair and debt consolidation can help you to rebuild your credit score after it has suffered damage due to your outstanding debt. If you think these services are the right course of action to help you, it’s worth knowing how they work and how they work together to restore your credit score.
What is Credit Repair?
Credit repair is exactly as it sounds — it involves going through your credit reports to check for any erroneous information and having it fixed if there are any mistakes. Generally, there are many reasons why there may be errors on your credit report, such as human error in confusing you with another person who shares your name or has a name very close to yours; fraud if you have fallen victim to identity theft; or you have a spouse from whom you are separated or divorced and their information was mixed with yours. Not surprisingly, errors in your credit report can have an adverse effect on your credit score if they aren’t caught early enough. It’s important to regularly go through your credit reports from each of the three credit reporting agencies, TransUnion, Experian and Equifax and check them on a regular annual basis. If you find any glaring mistakes or discrepancies, immediately report them to the agency to have them deleted or corrected. You can do this yourself, but there are also credit repair companies that will perform the service for you for a fee.
How Does Debt Consolidation Work?
Debt consolidation is a service that is offered to individuals who are struggling with the burden of debt to multiple creditors. It allows you to get the total amount of money you owe reduced by taking all of your debts and combining them into one. The interest rates are reduced so that your total amount is lowered. This is done so that it makes it easier for you to pay back the debt you owe. Your creditors or lenders are willing to overlook the excess interest simply so that they can be paid back. Debt consolidation is freeing for many people who owe debt to multiple sources because it becomes one payment that is easier to pay off. There are both pros and cons to debt consolidation. In some cases, the advantages may outweigh the disadvantages.
Advantages of Debt Consolidation
- You can improve your credit score by using a credit card with a lower interest rate. Often, debt consolidation may involve transferring the balances from your other, higher interest cards on which you have debt.
- Lower or fixed interest rate that allows you to pay less toward your debt each month
- Allows you to more aggressively pay back debt and focus on credit repair
- Allows you to skip having to schedule multiple payments every month
- Helps you to avoid multiple late fees and bad credit as a consequence
- Gives you possible tax breaks on interest on loans if you choose to use home equity or a second mortgage
- Allows you to save money while you pay off your debt
Disadvantages of Debt Consolidation
- You may have to pay more overall even though your interest rates are lowered
- Interest rate may be high in spite of allowing you to pay less each month toward your debt
- If you have a home equity loan you’re unable to pay back, you risk losing your home to foreclosure
- Consolidating revolving credit debts can work against you by resulting in the accumulation of even more debt
Using Debt Consolidation with Lower Interest Rate Credit Card
One of the best credit repair options is debt consolidation with a credit card that includes an introductory zero percent APR. It allows you to have a lower balance to pay off. If the credit card balance is close to your credit limit, you can improve your credit score because your utilization ratio also improves. You may also want to consider using a loan against your retirement account to consolidate your credit card debt. This can improve your credit score because retirement accounts are not reported to the credit reporting agencies. Overall, credit repair and debt consolidation can greatly help to restore your credit score. The services allow you to eliminate the burden of overwhelming debt so that you can breathe easily again and feel better about your finances.