The Pros and Cons of a Credit Repair Service

Having a good credit score is essential if you want to get approved for any financial service, whether that be an auto loan, a mortgage, a personal loan, or anything else.

A credit score of around 700 (Fico score), is a good score. For those who aren’t quite there yet, credit repair can make a world of difference.

Credit reports can be obtained free of cost once a year from each of the three credit reporting bureaus-Equifax, Experian and TransUnion. The Fair Credit Reporting Act (FCRA) requires the information on your credit reports to be 100% accurate. Otherwise, it must be removed. A study conducted by the Federal Trade Commission revealed that one in five people had an error in at least one of the three reports.

Here we will discuss the pros and cons of hiring a credit repair service so that your search for ‘Credit repair services near me’ leads you to hire the best credit repair company.

Why you should hire a credit repair service?

Chances are that you are too busy to deal with errors in your credit report. Even if you have time, you may want someone else to do the actual work of fixing a credit report. Some of the advantages of hiring a credit repair service have been mentioned below:

A credit repair service has the experience

You can try to repair your credit on your own. You will find a lot of good advice online. However, you may not be acquainted with the laws that can be used to your advantage. Are you familiar with the Fair Collections laws or the Fair Billing Laws?

A credit repair service is knowledgable about such laws and more. They can fix your credit. They can also help you understand how the different items on your credit report are affecting your credit score and where you can concentrate on instant results.

A credit repair service has the resources

While it is possible for you to manage by yourself, you will have to do everything alone, on your own. This may prove difficult. Improving a credit score involves filing legal documents and letters, talking with a collector or creditor, speaking with the representatives of the credit bureaus, etc.

A credit repair service has the experience to deal with collection agencies and credit bureaus. They know whom to contact and for what. They also have the skills to negotiate. This is because a credit repair service has been doing this kind of work for quite some time.

A credit repair service saves your time

Improving the credit score can be time-consuming. Also, the process is tedious. You may also find it taxing to spend time thinking about possible solutions to credit repair problems.

When you search the net for ‘Credit repair services near me’, you will get many results but if you choose a top credit repair service, they will find the best ways of repairing your credit score while you can use your time to focus on other matters that require your attention.

Why you should think twice about hiring a credit repair service?

There are all kinds of people out there. Do you know whom to trust? Some of the disadvantages of hiring a credit repair service have been mentioned below:

The services of a credit repair company aren’t free

Undergoing the dispute process may be free but to avail the services of a credit repair company, you will have to pay them. The price charged by a credit repair service to repair credit varies. It would depend on where you live and the type of services you require.

There are scammers everywhere

The possibility of getting scammed exists. You should be aware of your rights as a consumer under the Federal Trade Commission (FTC). The FTC forbids any credit repair service from charging any amount upfront. At the same time, you should be on your guard if someone offers a guarantee that your credit score will improve for sure.

Search the net for ‘Credit repair services near me’ but carry out due diligence to select the right service. Do you have any questions?

How to Build Credit Fast: A Step-by-Step Guide

Having good credit is an essential factor in being considered eligible for credit cards and loans. However, to build it, you need to have a reliable credit history. That makes it a Catch-22 situation for young adults and others who are starting and want to find the fastest way to build credit.

How do you build credit when you’ve never had a credit card or taken a loan? And how do you convince lenders to give you credit cards or extend loans when you don’t have a credit score?

Fortunately, though, you do have options to get around this conundrum. Moreover, you will even be able to build credit fast. Here is a step-by-step guide to help you:

Apply for a secured credit card

While many lenders will hesitate to give you an unsecured credit card if you don’t have a credit history, they won’t have a problem with offering you a secured credit card. In this type of credit card, you must make an upfront cash deposit that is equal to the credit amount limit. You can then use the card to make your purchases and pay off the balance every month.

The lender will report your payment history to the three credit bureaus—Experian, Equifax, and TransUnion—and it will impact your credit score. By staying below the credit card limit and making regular payments, you can increase your credit score and build good credit. You may even become eligible soon for a regular credit card.

Get a credit builder loan

You can get a credit builder loan from your local bank or credit union. After you apply for the loan and get approved, the financial institution will deposit the loan amount into a savings account for you. However, you can access the funds only after you have repaid the loan in installments over the next one or two years. Keep in mind that the whole point of such a loan is to offer you the fastest way to build credit. The three credit bureaus will make note of your regular loan payments and that will push up your credit score.

Keep your credit balance down

Paying your credit card bills on time is essential. However, instead of making a lump credit card payment once a month, consider making several small payments over the weeks. Pay right after you’ve used the card to make a purchase. These multiple payments will keep your credit utilization rate low, and that will work to your benefit when it comes to improving your credit score.

Ask the card issuer to raise your credit limit

By increasing your credit limit, while your balance remains the same, you can lower your credit utilization rate. Having a low credit utilization rate is crucial for obtaining a high credit score. However, remember to ask your credit card issuer if it will be possible to increase your limit without going through a hard credit inquiry. That might not be in your interest and might even end up lowering your credit score.

Become an authorized user on an existing credit card

The fastest way to build credit is to ask your family or friends to add you as an authorized user on their credit card. You don’t need to use their card, just be on it as an authorized user. Their credit history will then show up on your credit report and will be instrumental in boosting your credit score. Of course, that will only happen if they are fiscally responsible, stay well below their credit limit, and make their credit card payments on time. If they’re not, your credit score will take a nose dive along with theirs. So, only ask people you absolutely can trust.

Pay all your bills on time

While the FICO score doesn’t consider your rent and utility bills, other sources like the FICO Expansion Score and the Payment Reporting Builds Credit (PRBC) company do cover these payments. If you have been timely with paying your bills, it will increase your creditworthiness with lenders. Along with these steps, it will also help to review your credit report annually and make sure that it does not contain any errors that might damage your credit.

What You Need to Know About Bad Credit Auto Loans to Make a Smart Purchase

When you have bad credit, any loan you can manage to get approved for can seem like a blessing. But is it actually? A bad credit auto loan may actually cause you a lot more problems than you may have bargained for. Here are a few things you should know about before you take that bad credit auto loan.

You have bad credit for a reason

Whether you’ve fallen behind on bill payments or made a few too many late payments, there is a reason that your credit score is below average. Finding out why this is may be useful in enabling you to repair your credit so you don’t have to settle for that bad credit auto loan. But understanding how credit works is important, too. When you have bad credit, it means that you pose a higher risk to your credit lenders. Lending finances is a business endeavor for credit lenders; they make their profits off of the interest they charge on their loans. However, if you seem like too high of a risk, they won’t risk losing their return on you. That’s why people with bad credit get rejected for auto loans.

This is important to keep in mind, because bad credit auto loans aren’t offering loans to individuals in need out of the kindness of their hearts. They know that, because individuals who have bad credit are more likely to get rejected for loans, they can charge higher interest rates on the loans they offer. This is a security measure for them as well; charging higher interest rates works to mitigate the risk of their investment.

What can you expect from a bad credit auto loan?

A bad credit loan is called a Sub-prime loan. The main difference between a Sub-prime loan and a Prime loan is that your Sub-prime bad credit auto loan is going to cost you a higher interest rate. However, there are also usually fees associated with bad credit auto loans—such fees can include fees on obtaining the loan, a higher down payment, and sometimes even payment penalties. On top of that higher interest rate, sometimes a bad credit auto loan requires you to provide some form of collateral on the loan—this can be the car itself, in some cases.

Is it worth the extra cost?

This is something you will have to decide for yourself. If you need the car for work so you don’t end up falling deeper into debt and bad credit, then that’s definitely something to take into consideration. But keep in mind, too, that getting the bad credit auto loan may make your credit problems a lot worse—especially if you can’t keep up to the added cost of fees and high insurance rates. When you are factoring this all together, remember that owning a car also means paying for maintenance, insurance, and gas. Are the fees and high rates going to be too much to manage on top of the normal costs associated with car ownership? You may want to wait on that car purchase if it will be, or you may want to purchase a more affordable used car instead.

Remember that bad credit isn’t permanent. There are ways to legally repair your credit. Talk to a credit repair company today for more information about how you can start recovering your credit rating. Don’t just accept that expensive bad credit auto loan; consider your options in credit repair first so you can buy your dream car without having to pay unmanageable interest rates and fees.