Credit repair may seem pricey but when you step back and look at the return, its a no brainer the investment is worth it! Credit repair service helps you to get inaccurate and dubious entries removed from your credit report. Therein, fixing your report to accurately reflect your credit history, which in return recalculates your FICO score. In turn, you will find yourself saving a lot of money and qualifying for many more financing opportunities.
Understand the Value of Strong Credit
There is an immense value that comes out of having great credit.
You are suddenly eligible for incentive-rich credit cards, personal loans, mortgages and even small business loans. You have funds available if there’s ever an emergency — plus your debt comes at a lower price, as having good credit means you qualify for better interest rates.
The ability to save on interest costs is the silver lining here. For instance, look at how your credit score impacts your overall mortgage costs. With a FICO score in the 620-639 range, you will pay more than $115,000 above what a borrower with a 760-850 score pays in a 30-year amortization period. So even though an FHA home loan gets you into a new place with a 580 score (and sometimes lower), it still makes sense to repair your credit first.
This example was provided in our post here, which showcases the high cost of a low credit score in a major financing situation. It’s based on a $400,000 purchase price. While the actual savings will vary, it’s true that the interest rate discount is massive for homebuyers with strong credit scores. This factor makes it crucial for soon-to-be home buyers to maximize their credit score right before buying a home.
Credit Strength Provides Incalculable Benefits
The financial benefits that come with a strong credit score are not always foreseeable. Sometimes you only realize what you could have saved once it’s too late, and in hindsight you find yourself wishing you did something about your bad credit sooner.
The home buying scenario is a great example. Imagine if you buy a place with your spouse and they move out. The only way to remove one of you from the financing documents is to refinance. You will be eligible for that new loan if your credit is strong enough to qualify you.
In that scenario, having good credit can save you from being forced into a mortgage default and foreclosure. Suddenly, you prevent your family from going homeless or having to sell your property. This example alone should show you why you want your credit score to always be high.
How Repair Services Boost Your Credit
A credit repair agency will get rid of any inappropriate entries on your report. These instances are typically negative items that hold down your FICO score. By removing them, you could see a shift of anywhere from five to 100 points or more.
The actual adjustment in your credit rating comes down to the type of item that gets taken off. For example, a wrongly reported late payment or defaulted debt could give you a huge boost. The best way to calculate the score difference is by looking at how much your FICO score can drop from each action. Learn more on how to read your credit report to get an idea of how your score might change based on particular negative items.
Another benefit comes from having credit repair specialists work against debt collectors to void your debt. For instance, you might have an older debt in collections that was re-sold a couple times. During this process, if the debt amount was changed, it’s grounds for removal. It is common for debt collectors to add their own fees or report slightly different numbers — so this might be an easy way to get your credit score lifted a bit.
Is the Investment in Credit Repair Worth the Cost?
By law, a credit repair agency is required to provide their service before accepting payment for their work. You receive a written contract to fill out detailing the services they will perform. Unless specified as longer, you are legally entitled to a three-day grace period where you can request a refund.
There are many service providers that claim to offer credit repair help. Some market their services as credit-score boosters. While you can improve your credit score this way, you also have the right to dispute anything on your credit report on your own, but this could be very tedious and time consuming.
The part that makes a professional credit repair service so beneficial is the fact that they have years of experience(s). They know the ins and outs of error reporting and how to deal with everyone from the debt collectors to the credit bureaus. In short, you have a much better chance of getting negative items removed if you do source the work to a professional credit repair firm.
Free yourself of bad credit in every way possible. Sometimes the battle starts with improving your borrowing behavior. Yet, for anyone with removable/inaccurate items, it definitely does not end there. A credit repair service will help you get the hindrances removed from your credit report.
If you are unsure if you have errors on your credit report, why not get a complimentary credit consultation with one of our professional credit analysts to see how we can help you. Call 866-639-3426 and press option 3, they will review your credit report to see if there are any inaccuracies that could be affecting your credit.
The investment is well worth it because in the end, you may be able to achieve a much higher credit rating once these changes to your credit report are recalculated into your FICO score. A better score means a better interest rate which in return can save you thousands especially when you think about a 30 year mortgage!