We all have heard about the importance of credit repair and the repercussions of bad credit in life. In this article, we’ll dive deeper into what a credit score is and how you can maintain and repair your personal score.
What is Credit?
Before we discuss credit repair, we have to start by defining credit. Credit is the privilege to use the financial means of another party. When you apply to any financial institution for a loan, mortgage, or credit card, you need to provide evidence of the ability to repay the institution back and have a history of repaying past credit.
Having good credit comes with advantages as well. You can get better terms with lower interest rates if you have good credit ratings. However, with a poor credit rating, you may not get credit at any price. Building a good credit record is important to achieve many desirable goals, such as home ownership, vehicle financing, and various forms of wealth building.
What is Credit Repair?
If you have bad credit, all hope isn’t lost yet. You can always build your credit back up with credit repair. Credit repair is the process of cleaning up inaccuracies on your credit report, removing wrong or inaccurate information, protect your identity, and become more informed on your credit issues. If you repair your credit file, it is likely your credit score will improve, and thereby will obtain better interest rates and save money.
Why Repair your Credit?
Your credit record ultimately influences your qualification for credit in the future, and could possibly affect rates for your current credit lines. Accordingly, if your credit report is incorrect, the reparation of the credit file will help improve your chances.
A good credit score helps you obtain low interest rates and long-term loans, like home loans or car loans. Lenders may charge high interest rates or impose undesirable repayment plans for you if you have a bad credit score. Given the stakes and the consequences involved, it is clearly to your advantage to work toward recovering from a bad credit rating.
Now is the Time to Repair Your Credit
Negatives affecting your credit score can stay on record for seven to ten years. However, as time goes on, these negative stats start to matter less and less when balanced out with the positive actions you’re adding to your credit. This means that if you start positively adding to your credit score today, you can have a better score within a matter of months.
Right now, because of the Covid-19 pandemic, banks and financial institutions are being more lenient with offering extensions and even reductions because of the hardships faced due to the virus. Now is the time to act on repairing your credit score and building better credit for the future. Start by asking for a full credit report as of now and connect with a financial advisor to see what you can do to start taking action towards repairing your credit today.