Missing payments on a credit card or personal loan, overdue mortgage payments, bankruptcy and large amounts of debt are just some of the items that can adversely affect your credit rating. A low credit score means you will more likely be refused for credit items, or be offered products with high rates of interest, costing you more money in the long run.
By repairing your credit report and improving your credit score you will become entitled to more competitive rates of inertest, as finance providers will see you as less of a credit risk. For this reason, many people are using online credit repair services.
The first step to using these services is to fill in an online evaluation form. The information required usually relates to your personal details, and asks you to quickly summarize your credit problems, such as if you have been declared bankrupt, have court judgments against your name or have missed payments on your existing financial products.
After filling in the form you will usually receive a response within 2-3 working days. The company will provide details on what they consider to be the problem areas of your credit report, what they can do to help, and what fees you will have to pay for using their services.
It is important to be aware that it is illegal for online credit repair companies to remove accurate information from your credit report. If the negative items on your credit report are in fact accurate, there is little anyone can do about them. It is also illegal in the USA to pay for credit repair services up front.
The online credit repair companies will argue that they are advantageous as they as working for the customer, unlike the national credit reporting agencies, who work for themselves. It could also be argued, however, that many of the steps towards credit repair can be taken by yourself, without paying any money out.
Everyone is entitled to see their own credit report (at no cost) and correct or amend wrong information. The procedure for doing this involves writing a dispute letter to the relevant credit bureau, detailing the amendments that you would like made, explaining why you feel these should be done, and enclosing proof to back up your claims.
The main advantage to using online credit repair services is that they can save you considerable amounts of time and hassle, as you will not have to continually send letters back and forth to the credit bureaus. If you feel paying the fees warrants this, then these services are an option to consider. If not, you may wish to go about credit repair by yourself.
Either way, it is strongly recommended that any individual requests a copy of their credit report, regardless of whether you believe you have a good or bad credit score. This will allow you to check that all information is accurate and make amendments where necessary, as in the long run this will increase the chances of you being approved for a financial product.