THE ULTIMATE CREDIT REPAIR GUIDE
Getting a credit repair is more than boosting your credit score for that loan application you badly need. Cutting costs, saving money, creating financial success, and reaching your life goals are the other many benefits of building better credit.
People should then stop associating credit repair with individuals who have poor credit ratings only. Instead, everyone should start believing that even if you have an average or good credit score, improving your credit standing can also be advantageous to you in many other ways.
Like anywhere in the country, people in Alabama and California are affected by their credit scores differently. Depending on their current rating, some may get the lowest home mortgage rate, some with the highest, and some may be declined. Those who fall at the bottom two are then exploring possible means in improving their credit report. Whether it’s making payments on time, removing negative information, or rearranging debts – more and more people are opting to get a credit repair.
If you are one of the hopefuls who want to get a better credit standing and improve your bottom line but is not familiar with Credit Repair, then this ultimate guide is for you.
Credit Repair Objectives
The basic purposes of credit repair are to minimize or eliminate negative records and information on your credit report and eventually increase the positive records.
How to minimize or eliminate negative credit records?
If you would try to consult the best credit repair services in California, they will tell you that the credit repair process begins with obtaining the latest copy of your credit report and analyzing each line item. You need to highlight the negative information and work on getting them discarded.
Any credit repair services near Alabama would also advise you to look at the negative entries in your credit report and scan it for any error. You might find open balances that were paid a long time ago or adverse payment histories that do not belong to you. Getting these kinds of information adjusted and corrected will definitely give your credit score an immediate boost.
Looking for errors and correcting them is straightforward and easy to understand. But another major potential negative that may bring down your credit score is excessive credit utilization. Many consumers aren’t aware of this or do not fully understand what it means.
Excessive credit utilization is measured through your credit utilization ratio. The formula is the total amount you owe on your credit lines divided by your overall credit limits.
For instance, let’s assume you have four active credit cards with an overall credit limit of $30,000 when combined. If you’ve used up a total of $22,500 across your four cards, your credit utilization ratio would be 75% ($22,500 divided by $30,000).
If you have a 75% credit utilization ratio, then your credit utilization is considered excessive and will adversely affect your credit score. Payment history is the biggest credit score determining factor, and credit utilization come second. It is then critical that you keep your credit utilization ratio at a minimum or reasonable level as it accounts for 30 percent of your total rating.
The lower your utilization rate, the better your credit standing will be. An 80 percent ratio is deemed indicative of potential default since you are nearing your maximum limit, while a ratio below 30% is deemed ideal. If you already have a good credit score and still want to increase your standing, your strategy should include getting your credit utilization rate below 30%.
How to increase positive credit records?
Paying attention to boosting positive credit records is also important in enhancing your credit score as a lack of good or sufficient credit usually weigh down your credit standing.
If you are already making your monthly payment on time and need another way to boost your score, one best alternative is to pay off a credit card or loan. Your credit rating will instantly increase by paying off an installment loan or credit card completely, as your credit utilization ratio will decrease.
Moreover, credit bureaus view paid loans as a confirmation of a successful credit obligation completion. Having more of them in your credit report, the better. You don’t need to settle all of your loans. You just need to have an ideal mix of both open and paid loans in your report.
If you have a bad credit standing, then you can add good credit to your credit report by taking smaller loans, paying them on time, or settling them early.
Credit Repair Services
People who only have one or two negative items in their credit report find it more cost-effective to deal with repairing their credit on their own. While others, who have already have a good or average credit score, rely on DIY steps like above in trying to further improve their credit standing.
On the other hand, individuals who have a poor or fair credit score because of several negative credit records choose to engage with credit repair companies. Dealing with multiple negative entries is often challenging, complicated, and time-consuming. That’s why it’s best to hire the best credit repair services in Alabama or California to address each entry professionally and more effectively.
People also use credit repair services if they haven’t disputed a credit item successfully in the past, or they aren’t comfortable with negotiating on their own.
A credible credit repair services company is composed of competent and experienced professionals who know the ins and outs of the credit universe. They are well-familiar with dealing with creditors and disputing negative information – even the difficult ones.
Getting the right credit repair services company
You should take extra time and care in finding a reputable company that provides effective credit repair services. The credit repair market has grown massively recently, and unfortunately, there are companies that have little or worse, no real experience in what they offer.
Some credit repair services cost in California and Alabama are exorbitant, but service deliveries are below par. This is something that you want to avoid, hurting your pockets with no positive results to your credit standing.
To help you identify the most competent credit score repair services Alabama and California has to offer, take note of the below qualities that a true and legit credit repair services possess.
The very first thing that you need to check with your prospect credit repair company is their transparency. Companies who do not provide real information when trying to sign you up are most probably scammers. The few things that you need to look out for to ensure that a credit repair company is transparent are:
Upfront prices – Before signing up, ensure that you know the price that you are paying. Many legitimate credit repair companies make their pricing available on their website for potential customers to see.
Contract in full – It is required by law that credit repair companies provide a full contract to their customers before signing them up. The contract must include pricing, a detailed list of the services to be done, and other stipulations of the agreement.
Services to be done – A good credit repair company will sit down with you and discuss their plan in helping you fix or improve your credit standing. It should go over the step-by-step process and provide feedback to any of your queries or concerns about the services.
Good Customer Ratings
Checking the credit repair services reviews in California is one way to validate if your chosen credit repair company is legit. Make sure to check testimonials or reviews not only from their website but on other platforms as well. You can also ask your family, friends, or colleagues about their experiences, good and bad, with the credit repair companies in your area.
No High-pressure tactics
An honest credit repair services company will never put pressure on its clients to provide all personal information upon the first meeting or consultation. If you meet with them and you feel like they are using high-pressure tactics to force information from you, this is a red flag that they might steal or even resell your information.
Trustworthy companies will tell you upfront if they can help you with your credit score in any way, but if not, they will also say it to you courteously or even refer you to other credit repair services business who might be able to help.
No Quick Solutions
There are no speedy solutions when it comes to repairing credit. Fixing your credit score actually takes time, especially if it involves paying off debts or multiple negative credit entries. Here are some danger signals that you must look out for when it comes to credit repair timing.
Contesting negative records in your credit repair can take a while since credit bureaus have a certain number of disputes allowed each month. A credit repair company may be a scam if it guarantees to raise your credit score in a short amount of time.
An illegitimate credit repair services company may ask you to lie on your documents or even tell you to use a new but stolen credit ID. It may tell you it’s a quick fix, but doing this is unlawful, and you and the company may face legal actions for such.
Finding a trustworthy credit repair company that will prioritize you and your needs is easier and stress-free if you are aware of the things to look out for. An authentic and reliable credit score repair services company in California or anywhere else always put a high value on providing the best assistance to its customers. So, if you’re meeting a company that forces you to do something illegal or uncomfortable, better to turn away and meet someone else.
How to do credit repair on your own (DIY)?
If you have a limited budget and you can’t find cheap credit repair services in Alabama, DIY credit repair is an option you might consider. As long as you feel like you are up to the task of a do-it-yourself credit repair, you have no complicated credit report to work on, and you have at least disputed credit information in the past successfully, then there’s no harm in trying. To help you get started, here are the fundamentals that you should know.
Be aware of your rights under the law
In taming hostile creditors, you should know your lawful rights that are mandated by the federal law and regulated by the Federal Trade Commission. Limits as to what creditors can do to collect debts are set in the Fair Debt Collection Practices Act. For instance, they are not allowed to make threats or call you 24/7.
Get the latest copy of your credit report
It would be best to get a copy of your latest credit report from the three bureaus, namely Experian, TransUnion, and Equifax. Some information on one report may not appear on the others. Validate and review each one and highlight all the negative credit entries.
Look for mistakes or errors
A lot of credit reports reflect errors, and in most cases, it contains a variety of erroneous negative entries. You should contact the three bureaus and start a dispute if ever you will find any mistakes on your report. If upon investigation the credit line item is proven inaccurate, then such will be required by law to be removed.
Other times, you might also need to dispute a negative item directly with your creditor. But just like with the bureaus, you should only do this if you have hard evidence or documentation to support your claim.
Good to know credit score facts
In addition to the strategies you can use in getting your credit rating higher, it is also ideal that you are aware of the following:
How is your credit score determined?
- Payment history 35%
- Amounts owed 30%
- Credit length 15%
- New credit 10%
- Credit types 10%
Poor Credit Survival Steps
- Make collection calls stop by writing them a demand letter to do so.
- Remove inaccuracies from your credit report by disputing erroneous negative credit entries.
- Try spreading out your credit card debt my having multiple cards with low balances. Remember, the ideal credit utilization ratio is less than 30%.
- Many people don’t know that closing old accounts can have an adverse effect on their credit score. Credit length is part of the credit score formula, so it will be better to keep your oldest accounts open.
- Build a positive credit report history by making your payments on time or earlier. Never be late again, and you will start a big improvement in your credit score.
Whether you are calling in the professionals or going with the DIY route, this guide is your ultimate ally in ensuring that you will never hurt your credit score ever again. You can now start your journey to a more positive credit standing and financial freedom and later enjoy the benefits of getting your credit repaired.