It has never been more important to have a good credit score. A credit score helps determine your eligibility for a mortgage or car loan and also impacts the interest rate that you pay on these important loans. A borrower with bad credit may pay several thousand dollars in extra interest on a loan compared to someone with a good credit score.
What’s more, mobile phone carriers, car insurance companies and even utilities are using credit scores to see if you qualify for their best programs. If you don’t, you may end up paying a deposit or not qualify for incentives such as free smartphones.
A study from the Federal Trade Commission found that 25 percent of consumers identified errors on their credit reports that could affect their credit score. Making sure that your credit report is current and free of errors is best handled by a credit repair company. Credit scores are complex, and experts who help fix credit scores can help by removing mistakes and outdated information. The same government study found that four out of five consumers who disputed an error had a change in their credit scores. This is where a credit repair service will help the most.
How does a credit repair service fix your credit score? Your credit score is made up of five different components, according to FICO:
- Payment history
- Accounts owned
- Length of credit history
- New credit
- Credit mix