The effects of a poor credit history can be far reaching and hurt you in every sphere of life. Credit repair helps people improve their credit rating and improve their chances of getting further loan and credits at low rates.
Credit Repair: What is the need?
If you have a poor credit rating, you can improve it by undertaking credit repair. This will help you to:
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Save money on interest: You would have to pay higher interest rates on all types of loans, such as credit cards, if your credit rating is low. Repairing your credit rating would make you eligible for better rates, helping you save on interest expenses.
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Obtain a better credit limit: When you apply for a credit card, your credit limit is decided based on your credit rating. Better the rating, higher will be the credit limit.
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Pay a lower insurance rate: Insurance companies settle your premiums based on your credit history. With a poor credit rating, you will have to pay more for the same insurance amount.
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Avoid paying high security deposits: All utility service providers, such as phone companies, check your credit rating before offering you a service. In the case of a low credit rating, these service providers charge an advance deposit to offset increased risk of default.
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Get mortgage: All financial institutions check the credit history before lending money to you. Thus, in case you have a bad credit rating and want to get a mortgage for buying a house or car, your request may be denied. Alternately, you could be asked to pay high interest rates.
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Rent an apartment: Many landlords check the credit history before renting out their apartment to an individual. Your bad credit history might prove detrimental to obtaining an apartment on rent.
Credit Repair: How to do it?
You can take the following measures to improve your credit history:
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Get your credit report from your country’s three main Credit Reporting Agencies (CRAs)
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Scan your reports and identify incorrect information, accounts with late payments and charge offs, and accounts that are over the limit
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Dispute the inaccurate information, if any, in the credit report with the CRA and get the report rectified
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Settle your past dues and pay off charge offs as soon as possible
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Reduce your credit card dues to below the credit limit
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If you are paying some credit card dues on time, continue to make timely payments on them. You can also re-establish your credit by opening up a new account and making timely payments for it.