How Much Does Credit Repair Cost?

In the world of credit, a credit score is the most important thing. Whether you are looking for a loan, a mortgage, or a credit card, lenders will check your credit score first. This is to check your degree of creditworthiness. 

What is creditworthiness? 

If your friend asks for a small loan one day, will you give it to him or her, considering you know the person to be sincere? Most likely yes, you’ll loan such a friend the amount. 

However, if another friend, who you know to be insincere, comes for a loan, you’ll most likely deny that because you do not wish to risk your hard-earned money. 

Well, that is how money lenders, both banks as well as individuals, feel. They too are opposed to giving loans to those who are less likely to pay back on time. After all, lenders do not wish their loans to turn into bad debts. That’d be a massive loss for them.

A Bit About Credit Scores

In India, credit score is considered to be between 300 and 900. If you are closer to 900, the more likely you are to get the best loans with the best conditions. The further you are from 900, the poorer your credit score will be. If your score is below 570, it is considered to be in the poor credit score category.

People with poor credit score and credit history find it very hard to get credit of any kind. They also can’t get competitive credit terms.

Who calculates credit scores? 

Four credit bureaus, namely TransUnion, Experian, Equifax, and CRIF High Mark, calculate the credit score.

What to do when you want to repair your credit score

When your credit score is quite low, and below average, it may currently seem that there is no way to improve the score. The good thing is that although it appears that way, it is not impossible. It is not going to be easy to adjust the score, but it shall be well worth the effort. It takes time.

What is Credit Repair?

Credit repair is the process through which one brings an improvement in one’s credit score. Your credit score may have gone down for some reason. But the good news is that it does not need to stay there! You can definitely repair your credit score. It’ll take a bit of work, but eventually, you should be able to do it.

There are two ways of getting this done.

The DIY Method

Let’s say that you are traveling somewhere new. You are traveling by car and even have a map. That makes the journey easier, doesn’t it?

Similarly, when you know the steps to improve or repair your credit score, your journey is likely to be smooth. Credit score depends on a range of criteria, such as repayment habits, loans, credit card applications, the ratio of secured and unsecured loans, the number of hard inquiries, as well as the credit utilization ratio.

The very first thing that you need to do is get a copy of your latest credit report. Read and study it. Understand what the problems are, and identify which ones are causing a fall in your credit score.

From where do you get a credit report?

You’ll be glad to know that you can get a credit report once a year, completely free of cost, from any of the credit bureaus. This means that you can get credit reports at least 4 times a year for free! Additionally, in case you need to check them more frequently, you can subscribe to the credit bureaus at a certain price to access the reports further.

Apart from credit bureaus, you can get your credit score calculated by fintech companies, such as mymoneykarma. This comprehensive service is entirely free from us. We also tell you what is affecting your score, giving you an advantageous perspective.

Common issues adversely affecting your credit score: 

• Reporting and administrative errors

• Missed and delayed payments

• High credit utilization rate

• Too many credit accounts

Can you really repair your credit score?
You certainly can, but it will take a bit of time. Don’t expect the credit score to jump up within a day or two. It generally takes 6 to 12 months at the very least. If you wish to repair the credit score on your own, here are a few steps you need to follow:

• Pay attention to your credit report: Now that you know why the credit report is so important, you understand why it is important to ensure that it is error-free. What you need to do is to check it regularly. Once you do so, you can easily find the errors to rectify them. In case the errors are severe yet disputable, you can always approach the concerned credit bureau for rectification.

• Clear all missed payments: Missed payments mar your credit score considerably. You'd want to remove this blemish as soon as possible. This you can do by clearing all current payments.

• Stay away from hard inquiries: When you apply for a new credit or loan, you get what is known as a hard inquiry. This can be damaging to your credit score. It is a general advice not to take new loans or credit until your credit score has improved.

• Gets disputes resolved: If you have any disputes on financial matters, credit report errors, missed payments, etc. get them resolved. Once done, ensure that your score does not get tarnished by these instances again.

• Get a secured credit card: If you want to build your credit score, one of the most effective ways to do so is by getting a secured credit card. To get this, you have to make a security deposit. All activities on the card affect your credit score.

The Professional Help Method

Sometimes, things may seem too complicated or even downright intimidating to you. At such times, it is prudent to go for professional help. Here is when you should seek out professional advice: 

• When you want to get the best repayment terms

• When you do not have the time

• When the issues or errors are too complex

At mymoneykarma, apart from a free credit report with a comprehensive analysis, we also offer credit repair services.

To Conclude

Credit repair is a gradual process. If you choose an expert to do it for you, you mustn't be given an instant boost in the score. Such boosts are temporary and cosmetic at best and fabricated at worst. Check your credit score regularly to stay more informed.

Make sure that you choose an expert who comes with a proven track record in credit repair. This way, you can make sure that the service is worth every penny you spend on it.