Most of us choose the option of loans when facing a lack of funds for a new car or a house even for education too. When someone submits an application for a loan to a bank or any other financing company, they check for a credit report of the applicant. If his credit score is low, the application may be declined due to the low credibility of the applicant. When it happens, you need to go for credit repair services. In simple words, credit rating tells about your financial ability/credibility to return the debt money.
There are certain factors that are evaluated by credit reporting agencies i.e. Equifax, TransUnion & Experian to determine the credit score of a person or a business. Major Factors are
- Payment History
This factor tells creditors how regularly have you been paying your previous debts? If you have been falling behind in Debt Payment Instalments, it will show as a negative impact on your overall score.
- Debt to Credit Ratio
Total debt taken by you against your allowed credit limit is called debt to credit ratio. This should be as low as possible. Debt to Credit Ratio of less than 30% is considered as good and you may get lower interest rates from banks or credit card companies.
Some minor factors which also play role in the evaluation of credit score are
- Timeline of Bank Account
How long your bank account has been in your use. It will be a plus point if you have been using your account for a longer time.
- Frequency of Opening New Account
How often you open new bank accounts? If you have been opening a bulk of new accounts in different banks, credit reporting agencies will regard it as a negative attitude and lower your credit score.
- Type of Credit
If someone is responsible enough to manage different types of credit, it is considered a plus point for credit scoring.
8 Reasons to Repair Credit
If credit points stoop too low, you may find yourself in the endless struggle to find basic utilities for you and your loved ones. Here are some of the reasons why you should opt for Credit Repair Companies to boost your rating in terms of creditworthiness.
- Getting Rejected for credit card application
- Failure to get electricity connection due to bad credit track record
- Getting harassed by Debt Collection Agencies
- Not being able to get a loan from a bank
- Fewer chances for employment and promotion on key financial posts
- Difficulty in acquiring a house on rent
- Sudden blocking of credit cards
- Have to pay higher interest rates on lower credit limits
All of these reasons point towards one solution: Credit Repair
You don’t have to worry about doing it yourselves as it involves legal formalities and deep knowledge of procedural requirements of Credit Reporting Agencies. You may hire different agencies for credit repair on your behalf. Credit Repair companies try to find irregularities in your credit report and follow up those mistakes with relevant authorities to remove negative points from your credit report.
It is always better to hire a local credit repair company. For example, one should select Credit Repair San Francisco Company, if he lives in the city. There are associated benefits of choosing a local agency such as Personalized Service, Ease in visiting the office, and Lower Cost.