Credit restoration is a long process. It’s not hard to do, but it does require patience. If you are beginning the process of credit restoration, you can at least take comfort in the fact that, no matter how bad your credit is, following the right credit restoration steps will eventually clear your credit. At some point, you will have done enough credit repair to bring your credit score back up to high levels again.
What’s involved in restoring your credit? It simply means that you once had good credit, and then something changed, to impact your scores. You may have had a job loss, or a medical illness. Or, you may simply have taken on to much debt, and been unable to pay. For some people, they just do not have good financial habits, and the result is bad credit. Borrowing has become part of the American way of life, and even a way of life around the globe. But eventually, a borrower must repay, and if you’ve taken on too much debt, it can be a nightmare to find out you can’t possibly pay it back.
Getting started restoring credit begins with looking at your credit report. This will show all of your outstanding debt, whether it is comprised of loans, mortgages, credit cards and the like. Other financial information will appear as well, as in the case of any court proceeding against you to collect a debt or judgment. All of this information is reported to the big three credit bureaus. Once you get copies of all three reports, you should review them thoroughly to make sure they are accurate, and that no debts appear that are not yours, that balances are correct, and accounts are not open that do not belong to you. You can report errors to the credit bureaus, which will investigate and contact you with the results of their investigation.
After you know where you stand on your credit reports, you need a repayment plan. Setting up a payment plan is as simple as listing all of your credit bills and making the payments each month. But if you ave bad credit, you will need to pay up to date. That means paying any late balances in full, and making payments on time going forward. This is the heart of any credit restoration effort.
So given the above steps, should you use a credit restoration service? We think the answer is no. There is not much that a credit restoration company can do for you, that you can’t do for yourself. They will put you on a payment plan, and help you decide which bills to pay. However some services will appear on your credit report, and can cause your credit score to drop. Some services will encourage you to just let payment be late, until the creditors are willing to settle with you for pennies on the dollar. Unfortunately, that does not “restore” your credit history, it simply makes it worse. The only way to really restore credit, is to pay what you owe, pay it on time, and to find extra cash wherever you can to get those payments current. You’ll see the results no matter how poor your score when you began.
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