One of the effects of undergoing bankruptcy is the general destruction of your credit report, and it usually takes years to climb out from under the weight of a poor credit score. One of the options some people take after they go through bankruptcy, or after they experience financial difficulties that destroy their credit report, is working with a credit repair company.
The main drawback to using a credit repair company is that the service costs money, and you might not be particularly flush with cash when your credit report is at its lowest point, and you need credit repair. One of the most important questions to ask yourself is:
Can I repair my credit without the help of a professional?
Here’s how credit advice company Credit Karma describes credit repair services:
“These companies typically offer to review your credit reports and address any negative items that they can with the credit bureaus on your behalf.
A credit repair company is an organization that offers to improve your credit in exchange for a fee.”
Unfortunately, the Federal Trade Commission has indicated that the credit repair industry is rife with scams. One of the biggest indications that you’re working with a less-than-reputable credit repair company is when they ask for payment in full before they begin their work.
Credit Repair is Different from Credit Counseling
There are credit counseling companies offer advice and education for people who have bad credit or who are inexperienced with financial matters relating to their credit reports. These companies are often run as non-profit entities and don’t charge anything for their services.
If you simply want some advice on repairing your credit, or you want more information on why your credit report has a low score, you may want to contact a credit counseling organization as your first step.
Receiving free information about the state of your credit report may offer you all the information you need to make an informed decision about repairing your report and increasing your score.
Choosing a Credit Repair Company
If you feel you might benefit from a credit repair company’s services, there are some ways you can figure out if the company you’ve chosen is legitimate. Consider the following:
- The company has a good score with the Better Business Bureau
- Independent websites feature positive reviews about the company
- There are no complaints filed with the Financial Protection Bureau
You can also grade a credit repair company’s likely effectiveness by making sure they aren’t making any promises that they would never be able to keep. For example, a credit repair company shouldn’t promise that they can eliminate negative information from your credit report if that information is accurate.
Over time, you’ll see a natural reduction in the severity and harm of a negative item on your credit report. There’s nothing a credit repair company can do about the late payments on your credit report. You just have to wait until those late payments are no longer reported or aren’t considered “fresh” by the credit reporting companies.
Educating yourself on the way your credit report works might be all you need to figure out when your score will naturally increase over time. Further, adopting a habit of always paying your credit cards and loans on time can have a dramatic impact on your credit rating.
Are You Thinking About Bankruptcy?
Are you thinking about filing for bankruptcy but have no idea how to start the process? Would you like assistance from an experienced legal professional? Contact Suburban Legal Group for assistance with all matters relating to bankruptcy.
DISCLAIMER: All information on this website is provided for informational purposes only and is not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.