Is hiring a credit restoration company worth the cost?
Good credit is an important aspect of your financial health because when you do have good credit, more opportunities will be available for you, particularly when it comes to loans and financing. There are various ways on how you will be able to improve your credit score, such as hiring the services of a credit restoration company. This article tackles the cost of their services and whether this will be one of the most viable options for you.
Cost of Hiring a Credit Restoration Company
The fees that credit repair companies charge to their clients usually vary depending on the specific service that they need to perform. Nevertheless, the typical repair credit service ranges anywhere from $20 to $150. Depending on the issue that you need to be resolved, the fee that you have to pay may either be worth it or otherwise.
Reasons to Hire a Credit Restoration Company
- Complex Credit Report Issues
One of the primary reasons to hire a credit restoration company is when you have to deal with complex credit report issues that you may not be able to resolve by yourself. In this case, getting credit repair services will prove to be worth it. For instance, changes to your data brought about when collection agents buy or sell your debt can result in duplicate entries which may prove to be difficult to track. Rest assured that professionals may be able to address this properly, even enabling you to qualify for a mortgage as necessary.
- Timing Issues
Another reason why you may want to hire a credit restoration company is when you encounter timing issues. For instance, you need to boost your credit score the soonest to qualify for a mortgage or a car loan. Then getting credit repair services, in this case, may prove to be worth it. This is true in case you don’t have the time to spare to dispute the errors in your credit report yourself. Just keep in mind to properly evaluate a credit repair software company to ensure your safety and security since the content of your credit report is considered sensitive data.
How to Fix Problems Yourself
- Understand your Credit Score
There is also the option for you to fix your credit report issues yourself. In this case, the first thing that you need to do is to understand what makes up your credit score. The biggest part of it is your payment history, which is 35% of your overall score. This means that you need to eliminate any debt or late payments to improve your credit score significantly.
Apart from your payment history, you also need to take into account your amounts owed which makes up 30% of your credit score, as well as your length of credit history, which is 15% of your score. You also need to factor in your account mix and new credit which are both 10% of your credit score. When you understand what makes up your score, you will be able to put the proper effort into how you will be able to improve it.
- Dispute Errors
As soon as you understand what your credit score is composed of, the next thing that you need to do is to look into your credit report. You need to be meticulous in scrutinizing whether there are errors in your report for you to be able to dispute them accordingly. In this case, you need to dispute the errors directly with the three major credit bureaus and you can perform the process online.
- Improve Your Payment History
Because your payment history makes up the largest percentage of your credit score, you need to work on improving this metric. This means that you need to exert the effort to make payments on time because any late or missed payments will negatively impact your credit score significantly. You can even consider making a goodwill letter, requesting your creditor to remove the mark from your credit reports in an attempt to improve your credit score.
- Available Credit
As much as possible, you should also try to use less of your available credit because the lower it is, the better your credit score will be. Thus, if you can afford to do so, make multiple small payments in a billing cycle to lower down your credit utilization ratio.
When it comes to hiring a credit restoration company, the cost will be worth it if you are in a complex situation. Nevertheless, there is always the option for you to resolve the issues you find in your credit report yourself. Apart from being free of charge, you even get to expand your knowledge about credit scores and credit report matters.
