Credit Repair
If you are trying to qualify for that low interest rate home loan, auto loan, business line of credit or land that dream job, sometimes bad credit can crush your dreams. Everybody can legally remove legitimate bad credit items on their credit reports if the 3 major bureaus do not follow the law when reporting your information on your credit report. Credit repair may be your only option if you have bad credit and figuring out your options can be intimidating at first if you don’t know where to start!
Have you ever calculated the cost of bad credit on a monthly basis? On average you will spend more than $500-1000 per month more when you total all the extra interest, fee, rates, and charges that lenders and vendors charge people with bad credit. Take for example a $250,000 home mortgage. If someone with credit score in the mid 700s qualifies for 6% APR loan, their monthly principal and interest payment will be $1,498.88/month for a 30 year fixed loan. If a person with bad credit in the mid 500s is even lucky enough to qualify for the mortgage, they will be paying around 9-10% interest, maybe even higher if they don’t have much money to put down. So at 9%, their monthly principal and interest payment would be $2,011.56/month, which is about $500/month more per month than somebody with good credit. This is just one example where people with bad credit pay more.
You can expect to pay higher rates like this for nearly every service that you need to function in today’s society, including; auto loans, car insurance rates, health insurance rates, credit card interest rates, and every other vendor that uses your credit score to determine rates. This is why people with good credit save thousands and thousands of dollars every single year and people with bad credit desperately need credit repair.
Whether you are preparing to do your own credit repair or if you are in the process of choosing the right credit repair company, you must first know some basic facts? If you choose to carry out your own credit repair without seeking help from a professional, it is possible to do more harm than good if you don’t know what you’re doing. If you call up an old creditor in an attempt to settle a debt give, you can actually lower your credit score even further when the creditor updates your profile to show recent activity on a collection account, even if you pay the balance in full. This is because recent activity of any collection accounts dramatically reduces your credit score, especially if you don’t negotiate the proper terms of the settlement upfront. Once they have your money, you could be left with a lower credit score and a creditor who you have no more leverage with, because you already paid them their money.
Although some people think that credit repair consists of just sending in some dispute letters over and over again, they will quickly learn there is much more to it, and possible be worse off than when they started. If do not need to get a home loan, automobile loan, car insurance, health insurance, or any other form of financing, then you can always wait 7 years and your derogatory items will fall off, except for bankruptcy items, which take 10 years. Unless you have extensive experience in credit repair or you are well versed in the most recent changes in credit repair law, it will always be wise to consult a professional before you begin to repair your credit alone. Not only is a credit repair company a wise investment, they can free up valuable time to spend doing the things you enjoy.
Deciding which credit repair company to work with can be a tough decision, but is absolutely necessary if you wish to get ahead financial in this credit driven world. Make sure you understand all the terms and conditions of any credit repair company that you decide to work with, as well as all the different payment options. Once you finally repair your credit, make sure you avoid all the pitfalls that led to your bad credit in the first place.
Make sure you do your due diligence and look for only the top rated credit repair companies to work with.