Personal Finance

Credit Repair – How Can It Help?

Credit repair is helpful for people who have poor or bad credit scores and want to improve their credit rating. Your credit score is an important component to your personal finances and a bad score can be damaging in more ways than one.

A credit score tells lenders about your creditworthiness. This simply means it is a way for lenders to get a better understanding of your personal finances and your ability to pay back a loan.

If you do not know your credit score and you’re curious how it can affect your personal finances, you are not alone.

Many people deal with bad credit scores due to late payments on credit card bills, defaults on loan payments or even too many hard inquiries on checking your credit score. Bad or poor credit can weigh you down and damage your personal finances.

How Bad Credit Affects You

Bad credit can be detrimental to your personal finances and hold you back from many different things that are often referred to as the ‘American Dream’.

It is recommended to monitor your credit score regularly so you can be aware of your financial standing. It is not a good idea to apply for any financial products without knowing your credit rating ahead of time.

Ways Bad Credit Can Affect You:

  • Hinders your ability to borrow money from banks or lenders.
  • Higher interest-rates on credit products and loans.
  • Harder time getting approved when financing a car.
  • Scrutinized by landlords when filling out renter’s applications.

Having bad credit hinders your ability to get approved for loans with decent interest rates. Lenders might also require you to have a co-signer on any credit they extend to you to protect themselves in case you are not able to repay the loan.

If you have bad credit, lenders will penalize you with higher-than-normal interest rates. Getting hit with high-interest rate bearing loans can put you in a financial bind in the future if you are not careful.

Poor credit scores also put you at a major disadvantage when you are financing a car. Auto financing companies are hesitant about extending favorable loans to people with low credit score.

A bad credit score can also negatively impact your ability to get approved when filling out a renter’s application for a living situation. Landlords might be hesitant about renting to a person with poor credit.

Employers might even review this information when applying for a new job.

Bad Credit - Credit Repair - How Bad Credit Affects Me?

How Credit Repair Can Help Fix Your Score

Whether you made a mistake in your past by skipping out on a cable bill or you are climbing out of student loans; there are many ways you can boost your rating and fix your credit score. Credit repair is helpful for people who have a fair, poor or bad rating.

What is a Good Credit Score?

  • Poor: anything below 580
  • Fair: 580-669
  • Good: 670-730
  • Very Good: 740-799
  • Excellent: 800+

Your credit score is an average value that is aggregated from the 3 major credit bureaus. TransUnion, Equifax and Experian on the three biggest and most relied upon credit bureaus that lenders rely on.

Evaluate Outstanding Credit

Review all outstanding credit you have including any debt from loans, any credit cards in your name and any bills you are responsible to pay.

Every negative mark you have on your credit report will have an explanation and reason behind it. Each credit bureau will judge the marks differently which will result in their own evaluation of your credit score.

Fix Any Errors on Your Credit Report

Many people experience inaccuracies on their credit report and difficulties with the credit bureaus in hope of removing these errors. Make sure you take the time to visit each of their websites and follow their procedures to remove errors on your credit report. If you do this, you might not even need credit repair.

Old landlords might leave negative marks on your record, creditors might have bad marks due to late payments from previous statements and lenders might even hold you accountable for late payments that might not even be your fault. You must read through your entire credit report and pick out any errors or inaccuracies ahead of time.

Improve Your Credit Score

If you want to improve your credit score and avoid using credit repair services, you need to stay on top of your finances. Personal finance starts and ends with accountability and you need to hold yourself accountable.

Any time you want to make a purchase, think twice about it before swiping that credit card. You work hard for your money; stop spending it so quickly!

In addition to monitoring how you spend your money, you need to manage your expenses and pay your bills on time. Creditors will reward your good behavior by boosting your credit score over time.

Don’t lose hope on your credit score. With credit repair services and smart financial planning, you can get your finances back on track. Many people have gone from bad credit to excellent credit in a short amount of time.

Sources: Dictionary, FICO, USA.gov, TransUnion, Equifax, Experian

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