What Is Credit Repair and Credit Counseling?
Filed under Credit Counseling
Credit repair and credit counseling are two different things, but they often go hand in hand. Before you choose one over the other in an effort to address your credit problems, it’s important to make sure that you’re clear on what each one can do for your financial situation.
What Is Credit Repair?
Credit repair is something which you can do or you can hire someone to do that will help to remove old or false reports from your credit history. This process will help to boost your overall credit score and, while it can take time, it can help you to have a clean credit history with the numbers you need to get the credit you want or need.
Credit repair can be a lengthy process, but it usually begins with going over your credit report with microscope and picking out all the reports which are false. Once this has been done, letters are sent to the credit bureaus contesting the information. If it is found to be a legitimate debt, it will be time for you to negotiate payment terms which suit both you and the creditor and help to show the debt as “paid”.
In the end, credit repair can offer you a debt free future with a higher credit rating overall, but you need to be patient and know how to keep your credit in good shape, which is where credit counseling comes into play.
What is Credit Counseling?
Unlike credit repair, counseling teaches you how to have and keep good credit by working to keep your debt to credit ratio low, how to stay on top of your credit rating and history and how to maintain this good standing once you have obtained it.
Credit counseling can also help you to learn how to negotiate with current creditors so that you can get out of debt now and begin to have more of your money in your pocket to live your life. Often, the sessions are one on one and will teach you how to pay little or no interest when you use your credit cards and maintain a healthy credit record from now on.
You might be given ideas for repayment options on debts which you currently have that you’re struggling with as well. This can help many people to pay off the debts they owe at interest rates which they can afford, so instead of paying only the interest charges each month, people find they are able to chip away at the balance of the debt.
When you are working to build a strong credit score and history, and you want to avoid having the problem happen to you again, it’s a good idea to choose both credit repair and credit counseling. This way, you’ll have a strong credit report because of your credit repair and you’ll know how to be a responsible borrower because you’ve received credit counseling.
