Plenty of Americans have a hard time handling their credit! If you are one of these people, you are not alone. In fact, 34.8% of Americans have a credit score that ranges from 580 to 669. Understanding what it means to have a low credit score is important.
Your credit score can impact many different parts of your life! If you are dealing with a low score, you don’t have to be stuck in the same place. There are ways that you can repair your credit (even for free!).
But – will credit repair work for me? If you’re seeking an answer to this question – keep reading to find out. First, allow us to explain what credit repair is in the first place.
What is Credit Repair?
Credit repair is the process of addressing and correcting errors or negative items on your credit report in order to improve your credit score. A credit score is a numerical representation of your creditworthiness, based on information in your credit report. Your credit report is a detailed record of your credit history, including information about your credit accounts, debts, and payment history.
If you have negative items on your credit report, such as late payments or unpaid debts, this can lower your credit score. Credit repair involves taking steps to address these negative items and improve your credit score. This can include disputing errors with credit reporting agencies, paying off outstanding debts, and taking out new credit accounts responsibly in order to demonstrate your creditworthiness.
By taking these steps, you can work to improve your credit score over time and make it easier to get approved for loans, credit cards, and other financial products. It’s important to note that credit repair is not a quick fix, and it can take time for your credit score to improve. However, by taking a proactive approach and working to address any negative items on your credit report, you can work to improve your credit and achieve your financial goals.
Will Credit Repair Work for Me?
All that sounds great – but will credit repair work for me? After all, you don’t want to waste your time if there’s no point. There is no way to guarantee that credit repair will work for you, as everyone’s financial situation is unique.
However, credit repair can be an effective tool for addressing negative items on your credit report and improving your credit score. Some common negative items that credit repair can help with include errors or mistakes on your credit report, unpaid debts or accounts in collections, and limited credit history.
If you have a lot of negative items on your credit report that are accurate, it may be more challenging to improve your credit score through credit repair alone. In this case, it may be more effective to focus on paying off your debts and demonstrating good credit behavior going forward.
It’s also important to be aware that there are a lot of scams out there that claim to be able to repair your credit, but are actually just trying to steal your money. If you are considering working with a credit repair company, be sure to do your research and choose one that is reputable and has a good track record of helping people improve their credit.
How Can I Increase the Likelihood that Credit Repair Will Work for Me?
Want to increase your likelihood of seeing positive results from your credit repair services? Here is some advice to get you started on the right foot:
Working on Credit Management
One of the most important parts of handling credit repair on your own is to improve your credit management. Oftentimes, people don’t realize that good habits can get them back on the right path. Some ways that you can work on improving your credit score includes:
- Make all payments on time
- Keep your credit utilization ratio below 30%
- Don’t allow too many hard inquiries at once
- Regularly check your credit score
- Only apply for new credit accounts when you need it
Getting Help from a Credit Counseling Agency
Credit counseling agencies are a great way for people to learn about their current credit situation. These agencies have trained and certified individuals that specialize in a wide variety of consumer issues like consumer credit, debt management, budgeting, and more. Another perk? Usually credit counseling agencies are non-profit!
Disputing Errors You Find on Your Credit Report
Another way that people can handle credit repair is through the dispute process. Before you can begin disputing anything, you will want to get a copy of your credit report. You are entitled to one free report every year. You can get one by visiting AnnualCreditReport.com. However, you can get one at any point throughout the year, you just may need to pay a small fee.
Now that you have your report, you will want to go over it to look for any errors. For example, let’s say that as you review your report, you find that there is an account that doesn’t belong to you. You can dispute this error with one of the three main credit bureaus!
Thanks to the Fair Credit Reporting Act (FCRA), credit bureaus are required to report only accurate information. If found to be an error, the item will be removed for your credit report by the credit bureau you submitted the dispute to. You will see any negative impact to your score drop off as well.
Or, Consider Hiring a Credit Repair Company!
You can also consider hiring a credit repair company for this. A credit repair company may be able to help you improve your credit score by addressing negative items on your credit report. Some credit repair companies offer services such as disputing errors with credit reporting agencies, negotiating payment plans with creditors, and advising you on how to build a strong credit history.
It’s important to be aware that not all credit repair companies are legitimate, and some may engage in practices that are actually illegal. If you are considering working with a credit repair company, it’s a good idea to do some research and make sure you choose one that is reputable and has a good track record of helping people improve their credit. We have an article on legitimate credit repair companies to help you with this.
Keep in mind that you can also take steps to improve your credit on your own, such as disputing errors on your credit report, paying off outstanding debts, and taking out new credit accounts responsibly.
Credit repair is not a quick fix, and it can take time for your credit score to improve. However, by taking a proactive approach and addressing negative items on your credit report, you can work to improve your credit and achieve your financial goals.
What if Credit Repair Doesn’t Work For Me? Explaining the Credit Repair Organizations Act (CROA)
If credit repair doesn’t work for you – and it’s the result of choosing an illegitimate company – you can rely on the CROA, or the Credit Repair Organizations Act. This act can help protect consumers through legislation that helps a consumer spot legit credit repair companies. The CROA prohibits companies from:
- Exaggerating the services they provide
- Misrepresenting the services they provide
- Making false statements about your information to the credit bureaus
- Making promises to change your identity
- Providing consumers a new identity
- Charging consumers upfront before providing services
- Requiring the waiver of rights from consumers
Will Credit Repair Work for Me? Wrapping Things Up
So, will credit repair work for me? There’s only one way to find out. But in general, it never hurts to focus on repairing your credit. However, the way that you do it can make a world of difference. For example, let’s say that there are no inaccurate items on your credit report. That means getting help from a credit repair company may not be your best bet. However, getting into good credit management habits can help! The best way to handle credit repair depends on your situation.
Your credit score is an important part of life. That is why credit repair is important, regardless of your score. You can work on improving your credit through credit repair! There are a variety of ways that you can handle credit repair. The best way will depend on your current situation. You may benefit from getting in touch with a professional if you need some guidance. Take your time, and you will be able to see some serious improvements with your credit if you take the proper steps.
If you want to educate yourself further on the matter, we have a plethora of great resources on credit repair services here in our blog. You can learn about other options – like chapter 7 bankruptcy, credit counseling, a credit sweep, or credit restoration. Or, read our articles on credit repair for low income families, credit repair for veterans, or when to repair credit.