Have you been turned down for a loan or do you pay high rates for your car insurance? Both problems may stem from a bad credit score.
You may think if you don’t need a loan, your credit score isn’t important. That’s not the case, and having a poor credit score could mean you’re paying more for basic services than others with a higher score.
Is your credit score low? It’s time for some credit restoration help.
What is credit restoration and how can it help you? Keep reading for more information.
What Is a Credit Score?
Your credit score (or FICO score) is a number based on your credit history. The number ranges from 300 to 850 with 850 being the best credit score. A number of factors play into your score.
Is your credit score low? If so, it’s hard getting a loan. If you do get a loan, you’ll pay a higher interest rate than someone with a better credit score.
A good credit score also means you may not have to put as much money down for a utility deposit or apartment rental.
How Do Credit Companies Score Your Credit?
There are five areas credit companies look at when they’re assigning a credit score. These categories are:
- Your payment history
- Your total amount of debt
- How long you’ve been borrowing
- Types of credit accounts
- Recent applications for credit
Most companies report your information to the three major credit bureaus. Those are TransUnion, Equifax, and Experian. If you’re often late paying your gas bill or the mortgage, it shows up in your payment history with the credit bureaus.
Your score also takes into account the amount of debt you owe on any current loans. If your debt-to-income ratio is high, it’s bad for your credit score.
If you’re young and don’t have much borrowing history, that can also lower your score. Someone with a long history of borrowing and repaying his debt in a timely manner has a better credit score.
A mix of different types of accounts also helps your score as long as you handle them well. These include installment loans and revolving accounts such as credit cards.
Have you submitted any recent loan or revolving credit card applications? If so, then you’ve had a “hard” inquiry to your credit. This lowers your score for two years.
All of these play into your credit score. The question is, what can you do if your credit score is low?
We’re glad you asked. Let’s talk about credit restoration.
What Is Credit Restoration?
Credit restoration is credit repair. It’s the process of bringing up your credit score if you’ve got bad credit or low credit.
Fixing your credit takes time and is a meticulous process. It can also take a lot of time because banks and other companies aren’t always cooperative when you’re trying to make a correction to your report.
You can do the credit restoration process yourself but a credit restoration company can take some of the difficulty out of the process. There are some things that a good credit restoration company can help with that make your life much easier. Some of these include the following.
Mortgage Corrections
Have you gone through a short sale, foreclosure, or loan modification on your home? It’s not uncommon for the bank to report a short sale as a charge-off or foreclosure, or foreclosure with a deficiency balance. This harms your credit score.
A credit restoration company has experience working with uncooperative banks in getting the erroneous report off of your credit score. And speaking of charge-offs, you may be wondering what that is…
Charge-Offs
A charge-off is when one of your creditors closes an account because you’ve failed to pay and they’ve given up collecting from you. A charge-off hurts your credit score for seven years.
A charge-off doesn’t release you from your debt. There’s no quick fix to a charge-off but a credit restoration company can help you make a decision about how best to handle it.
Collections
Some charge-offs go to collections which then also show up on your credit report. If you’ve got bills in collections, don’t let debt collectors harass, intimidate, or threaten you about the debt. Call a credit restoration agency for help with the best course of action to take.
Late Payments
Late payments send a signal to any lender that you’re a bad loan risk. If you consistently pay your bills late, your credit score reflects it with a low score.
Everyone pays a bill late now and then but paying bills on time is important for maintaining a good credit score. Do you have a lengthy history of paying your bills on time with one late payment?
A credit restoration company can help you get that late payment off your credit score and improve your score by as much as 100 points.
Student Loans
Defaulting on a student loan can sometimes lead to astronomical penalties and fees. Let a credit specialist advise you of all your options for student loan repayments.
Identify Theft
Sometimes your bad credit score is due to identity theft. Correcting your credit, in this case, is a daunting and overwhelming process. A credit restoration company knows the laws and what steps to take first.
Before you dispute fraudulent charges with the credit reporting bureaus, there are certain steps to take. The credit repair company helps you with those steps so you can take back your identity.
Getting Help with Credit Restoration
Credit restoration is a daunting and lengthy task. Although you can do it yourself, a reputable credit restoration company can make the process easier and less overwhelming.
Remember that repairing your credit score isn’t something you do once. Develop good habits like paying your bills on time and always paying off your debts. Never borrow more than you can afford to pay back.
Are you struggling with a poor or low credit score? Do you need help restoring your credit? Contact us today for help restoring your credit and get yourself back on track!
