Credit Repair or Credit Counseling? Which Is Better?

As individuals, we have a habit of buying homes and cars when we receive a job promotion or miraculously hit the lottery. Even if our credit score is in the mid to high risk range, we will find a way to afford the purchase. The problem with that is this doesn’t immediately help our credit rating. In order to increase your credit score, you will have to continuously make “on-time” payments each month on that home or car loan. After about a year, it is then that your credit score will begin reflecting a positive rating and an increase in the overall score.

Unfortunately, for loan borrowers who are not approved for a loan, it may take the assistance of a credit repair specialist or counselor. If this is you and you need help with increasing your credit score, it is the time to figure out which service is best for you. Credit repair or Credit Counseling? Let’s find out…

Credit Repair

People who seek out credit repair services are usually those who need a quick change in their score. They do not want to wait 6 to 18 months before they see any changes. Instead, they call upon a credit repair specialist to help fix their credit issues. The issue with this, however, is that many credit repair companies charge hundred and even thousands of dollars for their service. And, their assistance is not even guaranteed.

Before spending your money on a credit repair specialist, be sure to research the agency. Check their Better Business Bureau reviews and other online reviews. Make sure that they are a reputable company that has proven results.

Credit Counseling

If you are willing to  wait it out before applying for a loan, try speaking with a credit counselor. Credit Counselor’s or normally free of charge (or charge a minimal fee) due to the fact that these services are offered through a home-buying program, your local bank, and/or a non-profit organization.

A credit counseling session will consist of ways in which you can begin to improve your credit score. The counselor will help guide you step-by-step on what to do and offer on-going support through the process. They will help you learn how to make better money management decisions.

Now, which is better for you?

To repair your credit history, it all starts with you. If you chose to tackle the improvement process on your own, you can obtain free reports from all three credit bureaus (i.e. TransUnion, Experian, and Equifax). Individuals are entitled to receive a free report every year. You can call each agency or go to www.annualcreditreport.com to request a copy. From that point, review your credit history. If there are any errors, act as your own repair specialist and send in a request for the bureau to conduct an internal review. Any errors unresolved within 30 days are entitled to be cleared from your credit report.

Your credit rating is important in this society. So, be responsible and do what’s necessary to increase your score!