Credit repair – what’s it all about
You have probably heard of credit repair services and the practice itself. In fact, you have probably been shelled by the advertisements from companies that offer the most incredible credit repair services you can find. They are being advertised as miracle sent from heavens and that is exactly the reason why you should learn more about this practice so that you know what you can expect.
Well, it all starts with you wishing to borrow money from a bank, for example. Now, they need to calculate the risks they are getting into by lending you the money. With banks and loans it is all about statistics and covering for all the possible eventualities. Therefore, they see your credit rating as the indication of how likely you are to pay them back.
These credit ratings are, in fact, statistical representation of your financial history and current situation and they are in fact a compilation of these, a huge list that is then analyzed in order to calculate whether you will be given a loan and how much you will need to pay back. Now, if you thought that it was the government providing this information, you would be very much mistaken. In fact, this is handled by three, private companies called Equifax, Experian and Callcredit. And considering how many people they are evaluating, there are bound to be certain mistakes that bring your credit rating down.
And it is these mistakes that credit repair is all about. A well-known and well-publicized fact is that in more than 80% of cases, the credit ratings contain certain mistakes that are discovered only when you analyze your credit history yourself. The point of credit repair is to find these mistakes and to make sure they are purged from your credit history, which brings your credit rating up. Because of this, credit repair is nothing illegal. In fact, it is bringing facts to light.
However, on the other hand, this also means that credit repair will only go so far. It will only correct mistakes that were made. If you did bankrupt three years ago, credit repair will not hide it or fool anyone into thinking this did not happen. Still, it can be an amazing thing for your credit rating and definitely something you need to consider.