DIY Credit repair: Does It Really Work?
by Nikitas Tsoukalis, Key Credit Repair
For a lot of consumers in debt, DIY credit repair may sound pretty tempting, but the real question is, is the DIY approach really as effective as working with a credit repair company with an established and successful history? As it turns out, the answer is: It depends.
Credit repair and good financial management requires a lot of work on the part of the consumer, but to get the best and quickest results, the best route usually requires the intervention of a credit repair expert. Thatís because credit repair companies have longstanding relationships with lenders that can often result in lowered interest rates or more favorable repayment schedules for you.
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That doesnít mean thereís nothing you can do personally; in fact, there are several things you can Ė and should Ė do to help repair credit. Here are a few steps you can take that can have a real impact over time:
Pay on time
Itís amazing how many people ignore credit card bills when they arrive because they donít have the available funds to pay. A better option: Call the credit card company right away and establish a payment schedule to get back on track.
Pay down your balances
Aim for an overall balance below 20 percent of available credit for all your cards Ė below 10 percent for the absolute best impact on your credit.
Establish an emergency fund
Sure, itís important to put as much cash as possible toward credit card debt, but if you donít have some extra cash set aside for emergencies, youíll wind up putting that expense on your cards again. Use automatic deductions to set aside five to 10 percent of each paycheck for emergencies.
Request your free annual credit reports
Every consumer is entitled to a free report from each of the three bureaus every 12 months. Get yours at www.annualcreditreport.com. You can also request a copy of your credit score to gain a better understanding of how lenders view you.
Respond to letters from your creditors right away
Ignoring late notices results in more late fees, increased credit rates and even legal action. And donít forget the cardinal rule of debt management: Donít apply for any new credit while youíre paying your current debts down.
Educate yourself about credit, spending and finance
None of these efforts will mean anything if you donít learn to control spending to begin with. Learning about how credit really works is one of the advantages of working with an established credit repair company.
DIY credit repair is difficult, especially if you donít have someone on your side helping you through the process and providing you with helpful credit tips to make the process more successful. No matter which route you decide to take, you need to begin right now. Make a commitment today to get the help you need to improve your credit and begin your journey to a more secure financial future.
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