A bad credit history can be an absolute nightmare for everyone. You are pretty much disabled from transactions that can be covered with cash, like renting an apartment, buying a car, applying for a credit card, or applying for a loan. An excellent place to start is to contact credit rebuilding services.
How do you choose a credit repair company?
– You might want to choose a company with at least three years of longevity in the field. Choosing a new credit repair company is no problem, but you don’t want to risk it. Choosing a company that has been in the field for a long time will put your mind at ease. Because a company will not stay in business for that long if they have poor services.
2. Have a robust and positive rating on Better Business Bureau
– Better Business Bureau or BBB has information on businesses you don’t know about. BBB handles complaints from businesses. So if you are looking for a good credit repair company, you might want to check credit repair companies with an A+ rating on BBB.
3. They charge a reasonable price.
– It is crucial that you know basic math when you are talking about money. It would help if you were resistant regarding charging fees. Assess the fees they charge you thoroughly because they make it sound affordable, but you’ll be paying more in the end. Choose a low-cost credit company with a good reputation.
Repairing credit history:
Consulting a credit repair company is the first option to repair a bad credit history. If credit restoration companies cannot clear any overdue bills or payments, the counselling service will approach your creditors.
That’s your second option in repairing your credit history. Contact your creditor.
They will seek to come to some agreement that allows you to pay smaller amounts over a more extended period. They will initially seek a formal arrangement where you deliver for an affordable part, usually over 5 years.
If you keep up with the reduced payments, your debts may be cleared for approximately three to five years. And hopefully, your credit score will improve.
Deb consolidation is the third option you have to fix your bad credit history. It is the quickest way to repair a bad credit history.
Debt consolidation is gathering all your debts in one. Meaning you take out a new loan to pay off your multiple debts. In that case, you will only have to pay for one debt instead of various obligations.
In consolidating your debt, you will have to have collateral. It will put lenders at ease in case you fail or miss any payments. In some cases, after two months of missed payments, they will already take possession of the collateral.
There are still drawbacks to debt consolidation, but there are still advantages to this, of course!
The drawbacks include the following:
1. Financial Problems won’t fix their own
– debt consolidation doesn’t mean you won’t be in debt again. If you continue your lifestyle that pushes you into debt, you may not get out of this problem. And you can kiss financial stability goodbye.
2. Upfront costs
– you need to ask your creditor about the fees included in debt consolidation. One factor you need to include is whether debt consolidation will be worth it.
3. You may pay higher rates
– debt consolidation will hurt your credit score during hard inquiries. Depending on your credit score you may get higher rates if you have a low credit score.
4. Missing payments will set you back even further
– missed payment means you have to pay late payment fees. And this can cause a lot of damage to your credit score.
Despite all these drawbacks, here are the advantages of debt consolidation:
1. Faster debt repayments
– because you only have one debt to pay when you consolidate your debt, it will become easier to pay it faster.
2. Simplified Finances
-debt consolidation is simplifying your finances. Because as I’ve said, you will only have one debt to pay instead of worrying about multiple debts.
3. Lower interest rate
– rates will depend on your current credit score. But most likely, you will have a lower interest rate.
4. Fixed repayment schedule
– instead of paying multiple debts with different deadlines, you will only have one debt to pay with only one deadline. If you have only one deadline, it will be easier to remember your repayment schedule.
5. Boost credit
– debt consolidation may damage your credit score at first because of the challenging inquiries. It will boost your credit score in the long run with responsible repayments.
You must search for the best rebuilding company that you will be compatible with to fix your credit history. Credit history is hard to fix because correct information will not be rectified and will stay there for the next seven years. But the right credit repair company will help you boost your credit score instead.