Top Recommended Guidelines on How to Repair Credit? 2024

You have been contacting one bank after another for a long time seeking personal loans, car loans, home loans, educational loans, or any mortgage. However, every time you reach out to them, they turn down your request or application on account of having a low credit score. Your 3-digit number, deciding factor of lending, is ranging on the downside undermining the confidence of the bank or credit card issuer.

You realize it is your fault & you could not be consistent in handling your financial dealings. You feel dejected and helpless.

No worries! There are in fact two ways how to repair credit – do it yourself or repair it with companies

Repair Credit and Its Maintenance: DIY or Repair It with Companies

Now, before taking up the course of doing it yourself, it is better to first look into the feasibility of getting it done with the help of credit repair companies. Credit repair companies have become prevalent and handy of late for people who are preoccupied and engaged with ongoing priorities.

However, the flip side of having your credit fixed with a credit repair company is that they would require you to pay an exorbitant amount out of your wallet. On top of that, there is no guarantee your credit is restored overnight, a day, a week, or even a fortnight. Hence, these are the significant challenges you would have to undergo while taking help from a credit repair company. If you want to just ignore these challenges, you can rely on their service provided you approach a legitimate company. It’s important to do it from a legitimate company, or else you will end up aggravating it instead of mitigating the hassle.

You will also have to check the company’s reviews once you have decided to go with a particular credit repair company.

Credit Repair Companies: Fixing the Damaged Credit

Below are some of the credit repair companies that are considered to be trustworthy and fast. You can get their help to improve your credit score.

1- CreditRepair.com

Established in 1997, this is an online agency that provides reliable and professional help at a cost of $99 per month. This rate is the most expensive in comparison to other credit repair companies, which is actually its drawback.

2- LexingtonLaw.com

Since its inception in 2004, it has completed servicing 500,000 satisfied clients at a cost of $89.95 per month. Hence, looking at their client base, it can be a good fit if you are looking to fix your credit score.

3- SkyBlueCredit.com

Founded in 1989, it has been providing credit repair services to its clients quite effectively. Their service is touted to be the cheapest at $79 per month. On top of that, their plan comes with a 90-day 100% money-back guarantee as well.

These are companies worth mentioning in so far as you are looking to take help from credit repair companies. There are others and, in fact, numerous companies that help consumers. However, before approaching them, never forget to check how legitimate they are and read the reviews of the companies yourself.

Do It Yourself Credit Repair: A Healthy Nature of Credit Resilience

Now, when we talk about doing it yourself to fix your credit, the first thing that should strike your mind is how vigilant you are. You should introspect about your past financial transactions and behavior as a spendthrift and another part of your financial dealings with not just financial institutions but also the consumer’s world like shopping malls. Consider all your financial behavior, and your mind will accordingly adjust to being diligent and ultra-careful.

Once you’ve become diligent about the expense and financial dealings, you accomplish your resilience. This clean financial behavior of yours is only a tiny dimension of your financial world. In other words, it has a minor recourse effect from the viewpoint of remedying your damaged credit. However, you will have a habit of good and clean financial behavior and dealings down the line.

Hence, you cannot underestimate the importance of your clean financial behavior in relation to restoring your credit. It was essential to understand the above-stated points in order to further relate yourself and ask yourself ” how to fix my credit?”

Well, as for credit repair DIY, there are many ways you can correct your damaged credit yourself. However, we will summarize only the important ones in the following manner:

Keep Yourself Updated with Credit Scores and Report

A credit report holds information about your financial dealings for the last 10 years. There are three credit bureaus that look after credit files: Equifax, Experian, and TransUnion. Your creditors – for example, your credit card issuers, or bankers – do not report your credit score to all of them simultaneously or altogether. For example, you have two cards — American Express and Discover Card. The Discover card might report to Experian and TransUnion for sure, but not Equifax. Likewise, American Express would report to Equifax, and Experian but not TransUnion. Hence, you need to seek your credit reports from all three credit report sites one by one, so you do not miss out on one.

You can request credit reports until April 20 of every financial year at AnnualCreditReport.com.

The purpose of checking your Credit Report is apparently to see where you stand. Ideally, you should lie at or above 670. You will get this picture when seeing the report. Based on this, you will work out accordingly or go for the next plan of action.

Fix the Errors and Put Up the Dispute

Making errors is a human tendency known to all. Hence, it is obvious that sometimes even credit bureaus commit mistakes or make errors. There is no doubt about it.

You have paid your dues and other outstanding on time. However, the debt is still appearing on the report. Therefore, make sure you put in claims and disputes as early as possible. You can send in credit report disputes via mail to each of the report agencies informing them there exists some false data on the credit report file. Despite those errors and have them removed. The sooner you can do it, the better it is for your credit reports to go on the higher side.

Make a Habit of Consistent Payment Frequency

Out of the deciding factors for your credit score, this one is the single and most important component in the formulation of a credit score. Because it consists of 35% of the total share among all the factors building your credit score.

Hence, if you want to know how to fix my credit, this is what rests at the top.

Except for the scenarios of budget or financial crunches, it is easy to maintain a good payment history at a regular frequency.  

You can opt to set up an autopay at each month’s payout.  However, if you have a tight budget, it is not a viable option as also for those whose income fluctuates. 

Hence, you need to keep a track of your payment history. 

Also, if you miss out on any payment over a month or 30 days, you need to persuade your creditor not to report to bureaus. Inform your creditors as to how you are going to manage it and convince them. This is how you can avoid your credit from getting affected by paying on time.

Try Maintaining a Credit Utilization Ratio Below 30%

The credit utilization ratio is an important determinant factor because lenders give you money based on the evaluation of your credit utilization ratio. Hence, if you are looking for resources on how to repair credit, it is definitely imperative for you to consider how to repair credit.

Some of you might wonder, what is the Credit Utilization Ratio? 

Let’s understand it with an example. Suppose you have two credit cards with a credit limit of $1000.00 for each card. Now, you have one unpaid balance of, let’s say, $300.00 on one card. You will divide this $300.00 by the total of each card’s limit i.e. $2000.00 multiplied by 100 to get the percentage. The resultant amount retrieved is 15%.

Your credit utilization ratio is 15% which is below 30% and it seems pretty fine.

Hence, try to maintain it between 30% and 0%. This aspect is considered good.

Obtain a Secured Credit Card

What is a secured credit card? Is it the question you have?

Of course, some of you might have it.

You might have heard this from a bank professional. They might have asked you this, “Well, if you are willing to take a loan amount as high as this, you need to have collateral security.” Meaning if you are ready to keep something in the bank or authorize the bank the ownership some of your property, they will give you money.

In a similar fashion, in order to get the secured card, you are required to pay a cash deposit. This cash deposit amount is equal to the credit limit assigned to you. It is a good practice to maintain your score because you do not have to worry about using a credit card. This is the best method to do it yourself credit repair.

Hence, you pay a cash deposit to obtain a secured credit card.

Frequently Asked Questions (FAQs)

1- Do credit repair companies really work?

Credit repair companies work well. However, they charge expensive fees. Besides, they might take the same length of time as it could be done by yourself.

However, please be aware that there are some scam companies doing credit repair work.

2- How to fix credit yourself?

There are multiple ways by which you can solve your bad credit score. First, try to imbibe good financial behavior. There are steps you need to follow such as

1- Always keep updated on your score from Equifax, Experian, and TransUnion,
2- Claim the disputes if any,
3- Consistency in payment,
4- Maintain a good credit utilization ratio below 30% , and
5- Carry a secured credit card.

3- How to fix your credit score yourself?

You can fix your credit score depending on which part your credit score affects. If it is due to one factor, you will need to work on it. However, it is due to all the factors, you need to work on all the factors discussed above.

Conclusion

As we have already discussed above, you can approach a credit repair company provided you can afford the expensive fees they would demand from you. Remember, when you reach out to a credit repair company, please don’t end up falling into the trap of scams. Collect all possible information about the company and read reviews about them before contacting them.

With credit repair DIY or repair it yourself, you can follow each step and procedure as explained above. You can check the scenario that affects you the most. If all of them affect you, you need to follow them all together one by one. Due to one factor, your credit gets affected, and you need to work on that particular aspect.  

Therefore, if you are able to follow the above-mentioned steps and guidelines diligently, you will definitely shine in the world of the credit report file. Once you accomplish this level of transparency in your credit file, the bank will proactively persuade you to take their money rather than you begging them for money.