If you have terrible credit, you might finally just throw your hands in the air and stop trying to improve your situation. The truth is, some people never attempt to repair their credit because they don’t know where to begin. However, credit repair is easier than you might think.
This doesn’t suggest that you can fix bad credit overnight… it can be a lengthy process. However, the benefits of a higher credit score far outweigh any time or energy it takes to repair your situation.
Here are seven important reasons why you need credit repair.
1. Stop harassment
Whether creditors call your phone or mail threatening letters, being harassed over credit card debt or any type of loan can kill your mood. And the longer you ignore past due balances, the worse your situation gets. Creditors may tack on additional interest and penalties, which snowballs the debt and makes it harder to pay off balances. Credit repair can put an end to this cycle and help you get on track.
2. It’s fast
You can’t snap your fingers and wish away bad credit, but credit repair is faster than many people realize. A professional credit repair company can help, and “many clients have seen exhilarating progress within the first 60 days,” according to Lexington Law.
Understand, however, that results vary. One person may have 27% of his negative items removed within the first four months, yet it might take several more months or years for another person to fully repair his credit. It all depends on the level of damage and whether credit bureaus cooperate. But the fact that credit repair can be a lengthy process is not a reason to toss the idea aside. Whether it takes one year or two years to remove erroneous information from your credit report, it’s well worth the effort.
3. Enjoy more options
Let’s be honest, bad credit can reduce many options in life. Some people with bad credit have a difficult time qualifying for certain types of employment; and with a low credit score, it’s harder to rent apartments, get utility services and cell phones, and you might pay higher insurance premiums.
4. Give your kids a better life
Even though bad credit might be stressful for you, it can also be stressful for your children. If you don’t have good credit, you might not be able to purchase or rent a home in a desirable neighborhood. And without good credit, you might have to pay cash for your vehicles or go without reliable transportation.
5. Cheaper loan options
One of the biggest reasons to consider credit repair: better loan rates and terms. When you apply for any type of loan, creditors base the interest rate on your credit history. Interest is basically the fee you pay a bank; and the higher your interest rate, the more you’ll pay. Bad credit may not kill your chances of getting a loan, but if your credit score is in the low 600s, the bank will charge a higher rate. Someone with excellent credit may qualify for a personal loan with a rate of 6% or 7% loan, yet you may pay a rate as highest 12% or more.
6. Peace of mind
If you have bad credit, you might lie in bed at night worrying about your situation. And if an emergency happens and you don’t have a credit card, you may panic and worry about money. With good credit, there’s the option of getting an emergency credit card, and you might even qualify for low rate short-term loans. But even if you never apply for another loan or credit card, it’s nice to know that you at least have the option.
Whether you have bad credit because of past mistakes or circumstances beyond your control, you can reverse the situation. However, you’ll need to be patient and work with a company that specializes in credit repair.