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Do You Need a Credit Repair Company?

Posted on September 18, 2010

As lenders continue to implement more aggressive qualifications for loan approval, consumers must be diligent in maintaining or improving their credit history and credit score.  What may have been considered a good score a few years ago simply will not do the trick in today’s economy if you are shopping for a loan.  In some cases your credit may be good enough to qualify for a loan but at higher interest rates than those offered to individuals with even better credit.  Lenders are not the only people considering your credit history; insurance companies and employers also consider how you have managed your finances in the past when reviewing applications.  If you have bad credit, your first priority to better improve your personal finances is credit repair.  There are plenty of ways to achieve this goal with one of your options being a credit repair company.

What is a credit repair company?

You have undoubtedly seen or heard advertisements from companies that promise to fix your credit problems.  These promises may include removing bankruptcies, judgments and liens from your credit file or erasing your bad credit.  Still other companies claim they can create an entirely new credit identity to help you move on from your history of bad credit.  While there may be a few companies that will honestly help you work on your bad credit history, almost all of these companies in the credit repair industry are interested in nothing more than separating you from your hard earned cash.  Proceed with caution if you are considering a company that offers services to repair your credit.

Do-it-yourself credit repair.

Before signing on with a credit repair company, consider steps to repair your credit yourself.  The first step in doing this is knowing how to spot and avoid help from individuals or companies that are nothing more than a scam.  It is also important to understand what actions you can take legally to fix your credit and actions that are illegal.  Finally, become familiar with debt elimination strategies and what factors are considered in determining your credit score and history.  Repairing your credit is not something that will happen overnight, however it is something you can do on your own without paying additional money for a company to take the same actions.

Stop the cycle.

One of the biggest challenges facing individuals with bad credit is a cycle of financial difficulty followed by bad credit which can in turn lead to another financial hardship.  To stop this cycle you have to address one issue at a time.  If you are struggling with a large amount of debt which makes it impossible to pay your bills on time or reduce your debt balances, eliminating debt must become your first priority.  Once you have achieved this goal, you can then begin to focus on the steps necessary to repair your credit and move forward to financial stability in the future.  Getting out of debt and fixing your credit are two of the most difficult challenges a person must face, nevertheless it is necessary to address both issues to stop the cycle responsible for financial instability.

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