Whether we’re down on your luck for a little bit or got a bit careless with your finances, bad credit isn’t the be-all and end-all. But there are times where you have marks made against your name without being aware you had done anything wrong. The first step to getting yourself back on track is recognising the problem. The next step is to delve down the path of repairing your credit score.
What is your credit score?
Put simply, it is a score given that reflects your credit history. If you have a good credit history and have repaid all debts on time with no issues, then you will have a high credit score. On the other hand, if you find yourself late paying back debts or unable to repay then, you will have a low credit score.
Lenders then use this score to determine how trustworthy you are when it comes to taking out a loan. There are many different factors that affect your credit score:
- Late repayments: if you don’t make your payments on time.
- No repayments: if you are unable to pay off your debt.
- Hard enquiries: if you make too many credit enquiries, this is reflected in your score. The trick to avoiding this is to shop around in 30 days and it only counts as one hard enquiry.
- Types of credit: having a variety of different credit types to your name can actually boost your credit score.
- No credit history: if you have no credit history then this will reflect poorly on your credit score.
- The amount owed: the amount you owe on credit will also play a role.
You make take a look at your credit score and realise deductions have been made for things that you didn’t approve. This is where you might look at going down the path of credit repair.
What is Credit Repair?
Bad credit history can affect your ability to take out future loans, and depending on what stage of life you are in, it can mean the difference between being able to afford your own home. Credit repair is the process of cleaning up your credit file and getting yourself back on track with good credit.
While this is something you can try and do yourself, going down the path of a credit repair company can be very worthwhile.
Credit repair companies are experts in credit repair and they will help determine whether all the negative listings on your file are legal. Here is the process:
- See if there are any listings on your credit report that seem out of place.
- Apply for a credit repair company and fill out a form detailing this.
- Receive a quote on fees to be paid based on your report.
- Get your application accepted.
- Creditors will then be contacted on your behalf with the goal of having defaults removed from your file.
Are Credit Repair Companies Legitimate?
So, are these credit repair companies legitimate? The answer: yes and no.
There are credit repair companies out there who can help you out and turn your credit file around. But, it’s important to note that there are also scam companies out there who will take your money and run. This is why you need to shop around and do your homework when choosing a credit repair company to help you out.
Here’s how you can determine whether you are dealing with a legitimate credit repair company:
Check if they have an ABN, which should be visible at the bottom of their website. This is the first step that will let you know if they are a registered business in Australia.
Make sure you have the full terms and conditions handed over to you before any payment is made. Legitimate companies will be upfront about all the costs involved and what you will receive for your money.
Google is brilliant these days for finding more information on a company’s reputation. All you need to do is look up some Trustpilot reviews and see what sort of record they have. If they are a scam site, a burned victim is likely to go online and speak out.
Do Your Research
Repairing your credit is a lengthy process that can take time. It can be good to have an expert on your side to get you through this process – as long as it is the right expert. If you are looking for a reputable credit repair company, one of the best tips is to jump onto Google or Facebook and check out reviews.
While some reviews can, of course, be faked, if you go to enough sources, you will find the truth. Facebook is a great place for this, as people can’t post anonymously. There are so many Facebook groups these days, you will be able to find one that caters towards this market and get the help you need.
At the end of the day, if you do your homework it is easy enough to find a legitimate company that can help you out and fix your credit for you.