Is it time to do your annual Google search for ‘credit repair services near me? Building and keeping a strong credit score is vital if you ever want to acquire a home or car. However, your life can be negatively impacted by poor credit. Having a low credit score might result in increased interest rates or, even worse, your credit application is denied.
What if you already have a low credit score? And how do you fix it? With a quick google search you’ll find a plethora of credit restoration firms that guarantee to enhance your bad credit score in exchange for a charge — but is this money well spent, or are these businesses promising things they can’t deliver on?
What do credit repair companies say they’ll do?
Before you search for ‘credit repair services near me, it’s important to understand what credit repair companies actually do. Credit repair service providers claim to be able to increase your credit score. The sales pitch goes something like this: for a price, the credit repairer will repair your credit score. Credit rehabilitation usually consists of three steps.
- You need to get a copy of your credit report from one of Canada’s major credit reporting companies — Equifax or TransUnion. Then send a copy of your credit report to the credit repairer once you get it.
2. Your credit report will then be thoroughly examined for any errors or discrepancies. Anything that should be disputed will be recommended by the repairer.
3. The credit repairer will make contact with the credit reporting agencies on your behalf to remedy any errors or inconsistencies they find.
What do they promise?
Most companies claim to be able to correct inaccuracies and “bad items” on your credit report, but can they truly deliver on their promises? While these services can help you remove an error from your credit report, no credit repair business can delete or eliminate valid information.
Some credit repairers make promises that are too good to be true — promising to delete negative credit information from your credit report, such as bankruptcies, but that’s not possible. So instead of restoring your credit, you’re more likely to get further into debt.
Can you improve your credit score on your own?
You’re in luck, to enhance your credit, you don’t need to use a credit repair company. You have the right as a consumer to contact credit reporting companies for free. These companies are required to provide you with one free credit report every 12 months. It’s a good practice to check your credit report for mistakes at least twice a year. If you find any inaccuracies, for example, you’ve paid off your auto loan but it’s still shown as overdue. You can dispute it with agencies — it’s as simple as filling out the paperwork that arrives with your credit report in the mail to correct an error.
Why do you need to improve your Credit Score?
If your credit score is low, there are steps you may take to raise it. For starters, you should pay down any outstanding debt and keep your credit utilization below 35%. After that make sure you focus on improving your credit score by paying for all of your payments on time each month. If you’re unable to make the full payment, that’s ok! You need to at least make the minimum payment on time for your credit score to improve.
You don’t always have to repair your credit score on your own. By looking up ‘credit repair services near me, you can get credit counseling from a recognized nonprofit agency to help you get your finances back on track if you’re in a tight spot. A credit counselor will assist you in creating a realistic budget and actually make credit card payments feasible. A counselor may also be able to work out a new repayment plan with your credit card company at a lower interest rate. The good news is that if you work with a credit counselor, your credit score should be unaffected as long as you stick to your repayment schedule.