How The Credit Repair Process Works


Credit repair is a hot topic on the internet these days. With offers on thousands of different sites, how can you tell which one will help you repair your credit? The best strategy is to know exactly what you are looking for, and to determine, for yourself, whether or not a particular credit repair site will do what you need.

Why Good Credit?
If you have a good credit rating, it can make it much easier to get loans for big purchases such as a house or car. Your credit rating will also affect the interest rate you pay for these big loans. For example, if you have a high credit score, such as over 700, you could get a car loan for as little as 0% interest. However, if your credit score is just over 500, your interest rate will be more like 21%. This can amount to thousands of dollars over the several years you have a car loan, and is based on the theory that the lender wants to get its basic investment back sooner, in case you default on the loan. If you have a $400 car payment at a 0% rate, you can bet that the same payment at a 21% will be around $600 a month. Do the math folks.

A credit repair company can clean up your credit rating in just a few weeks. This is possible because there are disputable elements on just about every credit report, and a company that specializes in this field knows how to handle the problem. First of all, the credit repair service will study your credit report for any obvious problems. Any late payments can be challenged. Late payments can decrease your credit score, but for a credit card company or bank to report you for late payments, they have to provide proof. A repair service will call the lender and request proof. Chances are, the lender will not want to take the time to dig through their archives to retrieve the information. Quite often, they will drop their claim about a late payment, which will automatically improve your credit rating. The process may take 4-6 weeks, because written notice has to be sent and received. However, once the process is concluded, most customers find that their credit rating has improved from 40-120 points. Hiring Credit Repair of course.

Another service you receive from a credit repair company is that they will make sure any false claims against you are dropped. One common problem is the canceled credit card. Some people will attempt to get control of their finances by paying off a credit card and cutting it up. What they may not realize is that if you close out a credit card, it must be reported as closed by your decision. If you leave it up to the credit card company, they will report that it was their decision to close your card, which translates as poor credit. Professionals will recognize this, and correct it. Corrections like these will quickly improve your credit rating. With mistakes and disputable items removed from your credit report, your rating improves quickly. This can make you eligible for lower interest rates.