When it comes to taking out a loan, you know that a credit score plays a paramount role. A lender will never sign off on your application without perusing your credit history. Soft credit check facility is mainly provided to borrowers with bad credit. This will not pull your credit score, but lenders will charge high-interest rates.
Short term loans can be easily obtained even if you have impaired credit standing, but a large number of borrowers ends up struggling to pay off the debt and eventually they fall in a debt cycle. If your creditworthiness is not up to the mark, you should immediately take certain steps to improve it. Having a good credit score will allow you to borrow money at lower interest rates.
You may have read several suggestions online that you should create a budget, track your spending, avoid using credit cards and much more. These suggestions are undoubtedly useful to improve your credit score, but they may take forever. It is not difficult to do things on your own, but sometimes paying someone else to do something for you gives better results. That someone else is none other than a credit card company.
How does a credit repair company work?
A credit company is an organisation that helps you improve your credit score in lieu of fees. It is different from a credit counselling agency that reviews your debts, credit report and finances to suggest you ways to build your credit without any fees.
A good credit repair company will get your report from all credit reference agencies – Experian, Equifax and TransUnion – because each of them has its own way to furnish data. Errors are likely to appear on one of your credit reports but do not appear on the others. If they spot an error on your report, they will dispute them. a credit reference agency takes 25 days to remove any error from your report after confirming that it does not belong to you. In such a case, you may be asked to submit evidence to prove that the account appears on your report does not belong to you.
Sometimes you may have no evidence, for instance, when your identity is stolen or a fraudulent account appears on your report in your name. In this situation, the company will try to convince the lender to validate information. They may also recommend you take out a new loan, but make sure that you will be able to pay back your debt on time. If you have already been struggling to pay off the debt, opening a new account might not be the right idea.
What to look out for
Not all credit repair companies are genuine. Most of them swindle customers and earn profits by charging very high flat fees. Make sure that the company is reliable and the service offered will work in your interest. Their services are not likely to be suitable for your situation.
Seeking help from credit card companies can be very expensive as you will have to pay flat fees and then pay for each derogatory remark removed from your credit report. This may range from £30 to £700 depending on the company’s policy.
The bottom line
Credit repair companies can help you improve your credit, but you should do it yourself as you can avoid spending money in fees. The rule of thumb says that you should check your credit report periodically to ensure that all details are correct and up-to-date; that you should frugally spend money so that you do not fall behind repayments.