Exploring credit repair is one way to begin the process of fixing a poor credit score and could make it easier to access credit with better terms and conditions in the future. While there are companies that specialize in credit repair services, beginning to repair your credit is something that's possible to do on your own.
Why It Matters
A survey conducted by Consumer Reports in partnership with Work Money found that "44 percent of respondents who successfully checked their credit reports reported at least one error."
This finding indicates that credit report errors are common, and these errors can have a significant impact on people's finances. Credit repair is one way people can address this issue.
What To Know
Credit repair is the process of taking specific steps to identify and fix errors on a credit report. Completing this process can lead to improvement in your credit score and the health of your credit overall.
Experts enthusiastically endorse the fact that you can complete credit repair on your own, by disputing inaccuracies. But they note that seeking out a credit repair service can be helpful if you need extra support.
"Hiring a service is really only applicable when the problems with your report are extensive, and you don't have the time or understanding on how reporting works to fight this battle alone." Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
The best candidates for credit repair are prospective borrowers hoping to access new lines of credit for significant purchases, like a mortgage or a car loan, according to Beene.
Kevin Thompson, finance expert and founder/CEO of 9i Capital Group, noted that people will need patience to repair their credit score because it could require a lot of follow through with creditors and credit bureaus. The benefit of a credit repair services is that the company handles that for someone.
In addition to preparing for these larger purchases, fixing issues on your credit report can save you money in the long run, Thompson said.
"Fixing credit issues before applying for a loan can save thousands of dollars in interest payments by helping you secure better loan terms," Thompson said.
What People Are Saying
Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "No matter how much a credit repair service may attempt to sell you on the notion, no one can remove accurate data from a credit report that reflects negatively on your borrowing history."
Kevin Thompson, finance expert and founder/CEO of 9i Capital Group, told Newsweek: "A smart strategy is to stagger your requests throughout the year. For example, you could check your Experian report in April, your TransUnion report in August, and your Equifax report in December. By spacing out your credit report requests, you can monitor your credit throughout the year without paying for additional services. This helps you stay on top of any errors, unauthorized activity, or potential improvements."
What Happens Next
Consumers should continue to keep a close eye on their credit reports to ensure no errors are affecting their ability to move forward financially. If working with a credit repair company isn't of interest, connecting with a reliable counselor from the National Foundation for Credit Counseling could be an alternative way to begin the journey of repairing your credit.
.png)
English (US) ·