Self Credit Repair Vs. Credit Repair Company

This is a guest post from Darin Sewell. He offers an interesting look at credit repair, and how you can fix it yourself. 

Today more than ever many people are discovering that their credit scores are no longer good enough to qualify for mortgages, car loans and other financial accounts. To overcome this problem a lot of people are turning to credit repair to try and help them improve their scores.

The biggest problem these people face when starting credit repair is deciding between doing the credit repair themselves or paying a credit repair company to complete the work for them. Below we will compare self credit repair to paid credit repair to help you decide what method will work better for you!

Using a Credit Repair Company

Most people start out by seeking the services of a paid credit repair company. The general feeling is that a credit repair company can do a better job and that the job will get done faster; let’s look at that in more detail.

While it is true that these companies are very convenient they are also very costly. On average a credit repair company is going to charge you $75-$99 per month of service. On top of that monthly fee most charge a set up fee of an additional $75-$99.

When taking these fees into account you need to realize that most people need at least 6 months to repair their credit. Multiply that out and you are looking at $500-$600. But the truth is that when using a credit repair company it often takes longer than 6 months. The reason for this is the longer it takes them the more they make and they are a business that wants to make money!

Additionally they will not be helping you with other critical areas of credit repair like budgeting your money, reducing your debt and rebuilding your credit history.  All they will be doing is trying to get negative items removed from your credit report, which is something you can easily do on your own.

Fixing Your Own Credit

Fixing your own credit is a popular and cost effective choice for many people and can give you results faster than a paid credit repair company can. The fact is that a lot of people are scared off because they have no idea what they need to do to fix their own credit, let’s briefly go over the basics so you can get a clearer picture.

What’s Involved In Fixing Your Credit

Examining Your Credit Report - the first step is going to be looking over your credit report and trying to find errors, false information and negative accounts. All of these can pull your credit scores down fast so they need to be identified and addressed. The best way to deal with them is to dispute them with a credit dispute letter sent into the credit bureaus.

Analyze Your Current Debts - Most people with bad credit often have too much debt. This does two things, first it makes it hard to pay your bills on time often giving you late payments that will reduce your scores. Secondly it will elevate your balance to account limit ratios and the closer you get to maxing out you card the more of a risk you appear to be and your scores will drop. You need to write all your debts with the monthly payments amounts down so you can start to pay it down.

Develop a Budget - Once you know how much your debt costs you every month you need to figure out based on your current income, ways to pay it down faster. You may have to bite the bullet and eliminate some things like cell phones and cable TV to find the extra money in your budget to get your debt aid down, but the sacrifice will be worth it in the end! Try to budget some money into a savings account every week as well, having a small savings will help you avoid piling on more debt in a financial emergency.

Re Establish Yourself - If you have bad credit you might have had a lot of your credit accounts canceled. You need to get some good accounts back onto your credit report so your scores go up and you show responsibility. Secured credit cards are a great tool for this job. Just make sure that the secured card you get reports to the credit bureaus and that you use it wisely and pay it off in full every month or it will hurt your scores more than help them!

If you need to repair your credit and do not have the money for a credit repair company or just prefer to do the work yourself you will need a detailed and proven system to follow along with. One of the best places to get this information is from a credit repair kit, there are many for sale on-line that will provide you all the information you need to improve credit score and get the job done from start to finish. Just remember to keep your expectations realistic and your dedication levels high!