Three Things You Must Look For in Credit Repair Companies

When searching for a credit repair company, it can quickly become confusing and turn into a daunting task. Outlined below are the three most important factors when choosing the right company for yourself and what you need to look for. Additionally, there are two warning signs of bad services, which should make you think twice.

Expert Lawyers

In some rare cases you’re going to need legal representation to write a letter on legal letterhead simply, file court intervention with a creditor, use legal tactics to force collection agencies or the credit bureaus to follow federal laws.

These lawyers are going to be experts on the continuously evolving consumer credit laws. They also will be fully versed in the debt collection laws and will be able to assist should you need to settle any debts.

Customer Service

When you hire a professional service to work on your behalf, they will use the dispute resolution process that is open to every citizen under the Fair Credit Reporting Act passed by Congress. What happens is that a letter of protest will be sent to each credit bureau to ask them to investigate the item you wish to remove from your credit report.

If your credit report contains many negative elements, you can expect to use a service for a few months. Necessarily, the service will act on your behalf, and you are invited to forward any communications you receive from the credit bureaus to the service so that everyone is on the same page.

The level of customer service you get with the service you choose should be exceptional. You should have an unlimited amount of time and have seen some services even provide a dedicated paralegal who is at your disposal all the time. It’s important to stay up-to-date with the status and progress of your reports.

The Costs

Some unfortunate individuals pay thousands of dollars for credit repair companies to work on their behalf. This is most common when hiring a private attorney who ends up charging the individual by the hour.

Instead, you should look for a service that charges a low, upfront fee and then a monthly fee. Commonly individuals spend approximately nine months using the service.

Be warned there are some companies that will charge you outrageous fees or use unethical tactics. The company you hire should be working to dispute bad credit with each of the three major credit bureaus, and they can also assist you in some debt negotiation.

Two Common Warning Signs

Offers A Guarantee

When it comes to credit repair, no legitimate company is going to guarantee you of anything. Instead, you should look at the companies’ past results, what old customers have to say about their experience and refund policy. They Applaud you for taking action to fix this issue of a low credit score. New economy lending institutions have drastically increased their approval requirements. Additionally, institutions are seeing more and more employers check potential job candidates credit record before offering them a position.

Piggyback Credit

A company wants you to use ‘piggyback’ on a credit card. This is an old outdated system where you would co-sign on a credit card with an individual with excellent credit, and it would help you and your low score – it hasn’t been effective in years!

Credit repair for Homebuyers in San Jose

First-time homebuyers in San Jose often underestimate the importance of a credit score. What can a three digit number possibly do to jeopardize your loan, right? As it turns out, it can. It can make or break your loan application. For a homebuyer, it might be another three-digit number. But for the lender, it is his measure of risk; the probability that you will not default on the loan application.

In fact, there is no other factor which has a more significant weight on your home loan application than your credit score. It has a direct impact on how your request is processed, the amount of time it takes to handle it and ultimately, the result which you get. Over time, a good credit score can help you save thousands of dollars worth of money.

You can, if you want, correct your credit score. With some amount of fiscal discipline, there are many ways to do it. If you want to get professional help about it, we suggest you give one of the San Jose credit repair companies a call and discuss your situation.

Why is your credit score so important

In this article, we have listed down three reasons why you must fix your credit score before going for a home loan application in San Jose.

  1. Home loan approval

Look around the internet a bit about the minimum credit score you need to get a home loan. Sites will tell you about the FHA loan, which requires a 500 points credit score with a 10% down payment. Sounds good,
right?

However, this is only theoretically correct. The reality is entirely different. The policy allows for a 500 point credit score to qualify for a home loan, but it is rare for a score below 580 to get a loan approval. Hence, you can give an application. They will even consider it. But, there is a good chance it won’t get approved.

  1. Home Loan Rates

What if, somehow you can get your application approved? Problem solved, right? No, far from it. Your credit score even has a bearing on the kind of rates you receive for your home loan. For example, if you have a rating between 580 to 620, you will be paying a rate which is 2-4% more than the lowest available slab. If you have a rating score even below 580, you will have to incur some very high rates.

On the other hand, if you have a rating score above 760, you will be offered a loan at the lowest interest rate available. Think about the difference a 3% increase in interest rate can have on your monthly expenses. If
you fix your credit score, you can save that 3% for yourself. Better still, you can reinvest it.

  1. Repeated attempts to get credit

So, why can’t I go for an application and we will see what happens. We often get to hear these kind of a statement from our customers. However, there is a serious issue if you apply multiple times and get rejected
every time. It can affect your chances of securing credit anytime in the future.

Repeated credit request rejections are the last thing lenders want to see in your loan application. They raise alarm bells and increase their risk. They can severely reduce your chances of getting your loan approved.