If you have bad credit that you are looking to get fixed, one of the first questions you might ask yourself is: do credit repair companies work? There’s no easy answer for this one. Many people head to credit repair companies looking for a magical fix to their problems, which just isn’t the case. But that doesn’t mean you won’t get the help you need to get your credit back on track. We take a look at both the good and the bad of engaging with a credit repair company.
What is Bad Credit?
Firstly, let’s take a look at what exactly bad credit is. Bad credit is reflected as a low credit score. This can affect your chances of being able to take out a loan. If you find yourself in a position of bad credit, it is a result of actions you took in the past when taking out a loan. This could include:
- Not meeting the repayments.
- Making late repayments.
- Owing too much money.
- Short credit history (the longer the better for your credit score).
All these factors combine to give you a credit score. When you go to take out a loan, the lender will look at your credit score to determine whether or not they should take a risk on you. Understandably, the lower your score, the less chance of being able to get a loan. If a lender does choose to take you on with a low credit score, they will generally charge you a much higher interest rate. As a result, you will end up paying back a lot more in the long run. This could also lead you further into debt.
What is Credit Repair?
If you find yourself with a low credit score, then credit repair may be an option to consider. Credit repair is the process of cleaning up any incorrect negative credit listings on your file. Of course, carrying out credit repair won’t work unless you are committed to changing your ways and financial behaviours to increase your credit score.
Do Credit Repair Companies Really Work?
Knowing how your credit score is affected by a number of different factors. We can begin to understand the exact role of a credit repair company and answer whether credit repair companies really work.
Let’s start by looking at what they do. Credit repair businesses review your credit reports and address any negative items to try and have them removed from your report. You normally pay per listing removed from your file. It starts with an initial consultation, followed by a review of your account, and if you choose to go ahead, you have to formally apply for credit repair.
- They do everything for you, so you don’t have to think about a thing.
- They know the correct processes to undertake to have negative listings removed.
- You pay for what is removed, so you know the costs upfront.
- They save you time, so you don’t have to do it yourself.
- They can be costly. If you are already in a bad financial position, it may not make sense to fork out the extra money to a credit repair company.
- You can do it yourself. This will be much more time consuming, but it can be done. There is nothing a credit repair company can do that you can’t, but you do need to do the homework and put the time in.
So, do credit repair companies really work? Yes, they do, it is just about weighing up which option is the best for your needs. If you do decide to go with a credit repair company, it is important to do your research, as there are a lot of fake scam companies out there.
How can you tell?
- Check the company has an ABN, this should be listed at the bottom of their website/
- Google and read reviews that aren’t on the company website to see what others have to say.
- Ask about fees upfront, many scammers won’t talk about the costs straight away.
Once you go down the path of credit repair, it is important to change your financial behaviours so you don’t find yourself in the same situation again. Only commit to loans you know you can pay back, and make sure all repayments are made on time. By changing your ways you will be able to ensure you maintain a high credit score, which will greater your chances of being able to take out a loan when you need to.
Get the Help you Need
If you are looking for a helping hand with your credit situation from a company you can trust, then speak to the experts at Clean Credit. We can help to fix up your credit report and dispute any errors. Our team of experts take pride in their professional approach and boast a high success rate. Get in contact today.