How Credit Repair Works

Your credit is becoming increasingly important as more businesses rely on your credit to make decisions about you. Many of the applications you put in require a credit check, even those that have nothing to do with credit cards or loans. When you have bad credit, you're always on edge, wondering whether your application will be approved or denied. You can eliminate that feeling by repairing your credit.

The goal of credit repair is to improve your credit score so your applications will be approved and your interest rates will be lowered.

Cleaning Up Your Credit Report

A major part of credit repair involves cleaning up negative information on your credit report. Since your credit score is calculated directly from the data in your credit report, any negative information will pull down your credit score. Damaging negative information includes late payments, debt collections, charge-offs, foreclosure, bankruptcy, repossessions, and lawsuits. High credit card balances and excessive credit inquiries can also pull down your credit report.

Adding Positive Payment History

Though it plays a big role in credit repair, clearing your credit report of negative information is only part of credit repair. If you have very few open credit accounts or all your accounts contain negative information, you need some new accounts to begin building some positive payment history. The more positive information you add to your credit report, the better your credit will be.

Paying Down Balances

High credit card balances could be dragging your credit score down. Credit repair involves reducing these balances or raising the credit limit on those accounts so the balance-to-credit ratio on those accounts decreases.

How We Can Help

Credit repair isn't rocket science. You can complete many of the credit repair steps on your own. However, many consumers don't feel comfortable attempting credit repair themselves because they're unfamiliar with the steps required. That's where a credit repair company can help. Credit repair companies have trained, experienced professionals who know the steps to take to improve your credit. They can review your credit report and help you decide what needs to be done to repair your credit.

There are a lot of credit repair scams out there, so it's important that you be careful about the credit repair company you choose. Credit repair companies are required to let you know your federal rights pertaining to getting a credit report and disputing inaccurate credit report information. They also must include specific details about their services inside their contract and let you view the contract before signing it.

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