Why Good Credit Is Important

Saturday, September 14th

It used to be that good credit only mattered if you wanted to take out a loan for a large purchase such as a house or a car. Those days are long gone.

A person's credit is now being used as a barometer for approving car insurance rates, utility services and even for purposes of employment. If you have poor credit, a lot of doors will be closed to you that just a few years ago would have remained open.

How, exactly, are credit reports being used nowadays?

Employment
Roughly 69 percent of employers polled in a nationwide study said they use an applicant's credit report as consideration for employment. Under the Fair Credit Reporting Act - which is administered by the Federal Trade Commission - employers are required to seek permission from applicants prior to running a credit check. Because employers can and do look at credit during the hiring process, it is a good idea to check your credit through the three reporting agencies (Equifax, Experian and TransUnion) at least once a year. Every person is entitled to one free credit report annually. You can request a report from all three agencies at the same time, or stagger your requests one at a time so that you receive a new report every three months. By doing so, it gives you a chance to correct any mistakes that may affect employment.

Credit Cards
It only makes sense that a person's credit history would be considered by any credit agency. Credit cards are no exception. If you have a history of failure to repay debt, you can expect to either be turned down for a credit card, or be granted one with an extremely high interest rate.

Houses and Cars
If you plan to own your own home, or to purchase a vehicle, having good credit is essential. Mortgage lenders, as well as car loan companies, want to be assured you won't default on a loan before granting one. As with credit cards, persons with a bad credit history can either expect to be totally denied for a home or car loan - or be subjected to an incredibly high interest rate.

Utilities
Most utility companies - electric, gas, water, phone and cable - will conduct a credit check prior to providing you with their service. Because most utilities are paid for a month after their actual usage, utility companies want to make sure you'll be good for the payment. And unlike a car or home, utilities can't be repossessed once they've been used. The worst that can happen if failure to make payment occurs is that the utility company will discontinue their service to you. But it may not be able to recoup what it already has lost. For that reason, utilities want to know your credit history before ever agreeing to open an account for you.

Starting a Business
If you have dreams of owning your own business, having bad credit can put a damper on them. Business start-ups generally require a large start-up cash flow. Many entrepreneurs do not have that kind of cash on hand; therefore, they find themselves in need of a business loan. Without good credit, you can kiss the possibility of obtaining a loan goodbye.

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What are the best Credit Repair Companies

Credit Repair Company FAQ

What is credit repair?

Credit repair is just like it sounds: a process by which your credit history and score are improved. This happens through negotiations with creditors, removing negative information reported to credit bureaus, and other strategies.

Do I qualify for credit repair services?

That will depend on several factors: your state of residence, the type(s) of issues you're looking to resolve, and so on. Most credit repair services offer a free consultation, to determine if you're eligible for their help and which approach to take in your specific case.

How much does credit repair cost?

Credit repair services typically charge a one-time setup fee and monthly service fees. One-time fees range from $19 to $195, and monthly fees from $29 to $159.95. You might get a discount if you sign up as a couple, or if you're a current or former member of the military.

Why should I use a credit repair service? Can't I do it all by myself?

Most of the actions taken on your behalf by a credit repair service can be done on your own. But, how much time do you have? Are you typically available to make calls during business hours? Hiring a credit repair provider can save you a significant amount of time and hassle. And, there's something to be said for letting the experts do the work, using their knowledge and connections to ensure that your credit repair process is done effectively.

What should I expect once I sign up for credit repair help?

The first step with any credit repair service will likely involve a thorough review of your credit report. Your representative will discuss your credit history in detail, help you identify actionable items, and give you a recommendation for which services are best suited to your needs. From there, credit repair providers work diligently to address the issues and resolve them, for as long as you maintain your subscription to their services.

How long will it take to repair my credit?

Most services state that you'll see negative items removed from your credit history within the first 90 days. The amount of time it will take to see an improvement in your credit score will depend on your particular circumstances.

Is there a guarantee that my credit score will improve?

Sometimes. A few credit repair services guarantee that you'll see those deletions within the first three months, and you'll get a refund of any fees paid if that doesn't happen. Other providers actually specify a minimum credit score improvement. It's a good idea to know exactly what you'll get from the service you select, before you sign up as a member.

Are companies offering credit repair too good to be true?

Credit repair is legitimate: working with a reputable service, you can absolutely see big changes in your credit report. On the other hand, there are companies that don't deliver what they promise. Be sure to check out the reputation of any credit repair service you're considering: customer feedback, number of years in business, and the service's BBB rating are all helpful indicators of a provider's trustworthiness.