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Did you know that it can be hard to attain your financial goals and achieve your dreams if you have a poor credit record? Usually, many companies will use your credit history to decide whether they want to do business with you. According to PRNewswire, 53% of Americans were denied loans in 2019 due to poor credit.
Besides, the success of your loan applications will be determined by your credit score. So, if you’re a consumer with an adverse credit history, you have to seek the best and most affordable credit repair services.
This is the best way you can improve your financial situation. It’s one of the most critical considerations you must keep in mind as you look into ways you can boost your credit rating.
Our article reveals the ‘must know point’ about credit repair services. But, first, let’s learn a bit about credit scores and how you can improve your score. This is necessary because you need credit repair services to boost your credit score.
Let’s delve in.
What’s a Perfect Credit Score?
Your credit score measures your financial health. It informs lenders of how responsible you’re in your credit matters. Such includes how you use your credit cards. Good scores make your new loan or credit line approvals easier.
A credit score of 850 is a perfect score. Usually, the ideal 850 scores will increase your confidence. But any score that’s 800 and above is considered exceptional. Such a score will allow you to access the best rates on your credit cards, personal loans, auto loans, or other professional lending.
It helps to know that credit scores range from around 300 to 850. Based on the FICO score, the credit score ranges include:
- 800 to 850 Scores- Exceptional credit
- 740 to 799 Scores- Very good credit
- 670 to 739 Scores- Good credit
- 580 to 669 Scores- Fair Credit
- Below 580 Scores- Poor credit
What Affects Your Credit Score?
You cannot be 100% certain about what affects your credit score. But, FICO gives some information that may hint at where the issue could be. It states that:
- 35% of your score originates from your payment history
- 30% of your score comes from your credit utilization or the amount you owe
- 15% of your score derives from the length of your credit history
- 10% stems from a mix of accounts
- 10% originates from new credit inquiries
When calculating your score, each category is further broken down. Usually, FICO doesn’t reveal how this works.
The specific credit bureaus that generate credit scores may also alter how they carry out calculations. At times, this may be to your advantage. For example, in 2017, changes were made to reduce the majority of tax liens, medical bills, and civil debts. As a result, most people’s credit scores improved.
Such standards followed a Consumer Financial Protection Bureau report. The report pointed out issues with credit reporting companies and suggested changes to help consumers.
If you want to try your best to hit the 850 credit score, you have to always:
- Pay your bills on time
- Eliminate almost all your debts (minus a mortgage)
- Watch out for your balance transfers
- Maintain your credit utilization rate to 4.1%
- Close any inactive credit card
- Avoid having too many credit cards
If you have a negative report, you’re not held back from attaining the 850 credit score. With a poor credit score that makes you not qualify for the credit you need, you no longer have to worry. The top-rated and cheap credit repair services guarantee that poor credit scores can be fixed. They work to ensure they settle any wrong or negatively stated items on your report records.
Part of the credit fix in the top-rated credit repair services is to ensure that they work to:
- Remove collection account from credit report
- Remove paid collection account from credit report
Why You Need Credit Repair Services
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Often, your credit report will have many items on it. As mentioned earlier, part of these items could be what affects your credit scores negatively. However, top-rated credit repair services help to eliminate the negative things from the report.
What happens is that; the credit repair companies contact the relevant credit bureaus. They then dispute and ensure the alteration of every negative item on your report. Such is attained by going through every process necessary to get rid of those items.
This is mandatory to ensure that your report returns positive and that you attain an excellent credit score. The procedures are based on the Fair Credit Reporting Act.
Some of the steps that the credit repair professionals will take include:
- Fix credit review
- Dissolve debit card fraud
- Deal with credit repair after divorce
- Handle relevant prepaid credit cards that report to the credit bureau
It’s not easy to come out of a divorce when you have a damaged credit reputation. Moreover, DIY credit repair won’t offer you a quick credit fix. But, working with top-rated credit repair services will quickly put you a step closer to great credit scores.
How Much Does Credit Repair Cost?
How much credit repair cost depends on the company. It helps to work with the top-rated iMax credit repair company. Generally, the company may charge in any of the following two ways:
- A pay-per-delete model- the credit repair company charges for each error they can get rid of from your credit report.
- A subscription-based model- is the most common method used by credit repair companies. Depending on the particular package, they may charge anything ranging from $50-$150 monthly.
You’ll find that your credit repair company may have a way to get you to stay signed up with their services for some months. They may also offer you credit score updates, and since it may take several months for your score to update, they may recommend that you stay signed up.
So, you’ll be paying monthly fees until the changes are evident in your credit report.
Can a Prepaid Credit Card Help Your Credit Score?
Prepaid cards are not like credit cards. Unlike credit cards, activities from a prepaid card are not usually reported to the credit reporting agencies. Thus, it will not help in determining or maintaining your credit score.
Prepaid cards can be an excellent way to help you stay out of debt. This is because you can’t spend anything more than the deposited amount. So, it’s also an effective budgeting tool.
What’s the Importance of Seeking Top Rated Credit Repair Services?
If you want to quickly fix the errors on your credit report and improve your credit score, it helps to hire a good credit repair company. It’s a wise decision because the credit repair professionals will help you handle the process faster and expertly.
The credible and top-rated credit repair company will work on your behalf by engaging the major credit bureaus. They will ensure the bureaus get rid of the negative items harming your credit score. These items include bankruptcies, late payments, charge-offs, and debt collections.
Frequently Asked Questions (FAQs)
- Is It Necessary to Check My Credit Report?
It’s vital to keep checking your credit report. This is what will help you know your credit score and improve them. You also ensure that your personal and account details are correct. Once you improve your score, you increase the chances of getting reduced interest rates on your credit cards and loans.
- Can You Go Above Credit Score 850?
Yes, it’s possible to go above 850 credit score. But lenders are unlikely to note much difference between your 850 scores and those slightly above it.
- Is Credit Score Same as FICO Score?
Yes, essentially, credit score and FICO score refer to one thing. FICO is a credit scoring model. Different reporting agencies apply somewhat varying factors, but they all measure the same thing.
- Does FICO Offer Industry-Specific Scores?
FICO also offers industry-specific scores. For example, credit cards or auto loans may range from 250 to 900. There are various FICO versions, the latest being FICO 10. Mortgage industry lenders often use older versions of FICO scores.
Key Takeaways
Keep in mind that any minor error on your credit report could be what prevents you from getting the loan you need. It could also hinder an additional credit on your card or even a loan limit increase. This is why you need to work towards the perfect credit score possible.
For those with low credit scores, all hope is not lost. There are credit repair professionals that can sort out your issue. Through the credit repair services, you’ll be able to know the credit report errors that may be affecting your credit scores. Thus, you get your credit issues fixed. As a result, you begin a new journey towards an excellent credit score and improved loan rates.