Can I do my own credit repair or do I really need to hire someone else to do the work?
The short answer is, Yes, you can do your own credit repair.
The longer answer is, Yes, you should be involved but only in part of the work. That is another way of saying, No, do not try to do it all yourself.
I believe people should take an active role in their financial health and financial planning. A good Credit Score is vital to long-term financial health and deserves attention. These days, a good credit score is at least 700 and you will likely need close to 800 to get the best deals. There is really no way around it; you need to be aware of your credit score and involved in both raising it and keeping it high.
My BEST answer is that you should focus on the positives and hire someone else to handle the permanent removal the negatives.
I will talk more about positives and negatives in a minute, but first I want to look at some of the items that go into fixing credit or improving credit score that either you or someone you hire is likely going to do.
Request a report from all 3 credit bureaus
Review it for obvious errors
Interact with the bureaus to correct errors
Look for reporting errors by creditors
Interact with creditors to get these fixed
Look for any errors or inconsistencies by the bureaus
Interact with all 3 bureaus to get these fixed
OK. It is pretty simple and straightforward, but somewhat redundant. There are three questions to consider here.
First, can you do it yourself?
Second, are you as qualified as someone that does it for a living?
Third, do you have the time? Or what is the value of the time it will take you?
What are positives and negatives and why do I not want to just hire a credit repair service to take care of the entire job?
Negatives are items on your credit report like bankruptcy, judgments, delinquent or late payments, overdrafts, etc. Negatives hurt or reduce your credit score.
Positives are not just the absence of negatives, they are items on your credit report that help or increase your credit score. Some examples include having multiple credit sources, having credit for a long time, not using all of the credit available (low balances on credit cards), etc.
It may be easy to see that negatives are bad and positives are good. But why should you work on the positives rather than someone else?
For this part, we will look at what it takes to increase positives and decrease negatives.
Positives include actions like paying your bills on time, budgeting, reducing total debt, keeping the credit cards but not maxing them out, reducing the amount of credit used versus total debt available, and accelerating debt payoff.
Negatives include actions like correcting administrative errors, correcting reporting errors, ensuring permanent removal not temporary removal, correcting legal errors, repeatedly communicating with credit bureaus and possibly creditors until permanent removal of negatives is complete.
You work on and manage the positives for these reasons:
1. they involve your money directly
2. they involve your budgeting and financial planning
3. you already have the most expertise with your own finances
4. solutions will need to be maintained for the long-term; you will continue with the solutions
Hire someone else to remove the negatives for these reasons:
1. they do not involve your money, they are primarily administrative
2. experts do this work for a living and have the experience and tools required
3. most people do not have the experience or expertise
4. it is very time consuming and an iterative process
5. once the negatives are permanently removed, the job is done
6. if you handle the positives correctly, you do not have to work the negatives again
I believe you should work the positives and reap long-term benefits from the solutions you implement and the skills you gain in doing this part yourself.
You should always be involved in your own financial planning and you should always have control over your own money!
I believe you should hire an expert to permanently remove the negatives. You will get better results, faster, and be able to spend your valuable time on the activities that positively impact your credit score.
You should always control your own money because it adds an element of risk if you let an outside service control your money; let them work on the administrative part of credit repair.
Michael Wilson is a Personal Financial Strategist with Smart Money For Life. He guides individuals to realize long-term financial health and growth. See programs and strategies to help meet your financial goals at Smart Money For Life. Visit his blog at Family Financial Values.
Tags: financial planning, finance, credit repair, credit score, bankruptcy, personal finance, credit bureau, late payment