A credit rating reflects an individual’s payment history and is usually measured by a credit report. There are three main companies who provide these and they are known as credit reporting agencies, or credit bureaus (Equifax, Experian, and Trans Union). Every month creditors provide the bureaus with updates in regards to the customer’s financial information.
A credit report is extremely important to an individual’s life. A copy of their credit report is viewed each time a person applies for a loan or credit of any kind. Having poor credit often leads to the denial or an inflated interest rate. A person’s credit can affect everything: Purchasing a home, getting a low rate credit card, or even receiving a student loan. Employers are even beginning to view credit reports prior to hiring. People that have learned the hard way know that, like a grade point average, it is much easier to maintain good credit from the beginning than it is to repair credit that has been damaged. There are numerous measures that can be taken to restore financial stability.
One way to credit report repair is awareness. Many people find it helpful to get a copy of their reports for monitoring. This allows a person to check their credit report and score at any given time and usually does not cost anything for the first month at least. There are actual credit repair services that are available to clean up credit reports and even provide credit counseling.
Companies providing credit report repair services aim to help repair credit by offering debt consolidation, debt management, and credit counseling. They help people face past due accounts, lower monthly payments, and better manage their money overall. These services can consolidate all of an individual’s unsecured creditors into one low monthly payment. Many services remove your monthly payments from an automated withdrawal system straight from a person’s account so they do not have to deal with it.
Other credit report repair services operate differently to clean up poor credit. There are different processes involved in cleaning up credit reports and can be repeated until the individual is satisfied with the results. The first step is forwarding the company copies of the credit reports from all three of the major credit bureaus. Once the reports are received, their staff enters the information into their database. The customer then chooses which items to dispute. The credit repair service then begins the disputing process to challenge negative items directly with the credit bureaus. Depending on the number of negative items on the person’s credit reports, this may be repeated. The credit bureaus then have thirty days to investigate the dispute and inform the person of the results. The bureaus then update the individual’s credit report and send them a copy of the updated version. This cycle can be repeated as many times as the person desires in order to achieve the kind of credit they wish to rebuild.
Again, this process is realistic but time consuming. Without a doubt the best solution is trying to maintain good credit before the credit rating gets low enough that it starts to negatively affect a person’s life. Credit report repair, although extremely helpful, is a long process that should be avoided if at all possible.
By Kristin Lockwood