Nothing is worse than missing out on the house of your dreams simply because of a poor credit score. In fact, the poor credit score may not even be your fault and could be the result of inaccuracies on your credit report. In situations like this, working with the best credit repair company in El Paso, Texas might be the best thing you can do.
How Do Credit Scores Work?
In the United States, each individual’s credit score is determined by three credit reporting bureaus. They are known as Experian, Equifax, and Transunion. Each of these bureaus uses its own proprietary formula to calculate your score, and your credit score from one bureau to the next may be wildly different.
For those wondering how often your credit score updates, each bureau calculates the timeline differently based on your monthly payment schedule and when the information arrives from the banks regarding your payment and balance status.
For many mortgage lenders, most want to see a credit score in the mid-600’s though some may go as low as the mid-500’s while charging exorbitant interest rates. Every type of credit, be it auto loans, mortgages, or credit cards, has its own credit score requirements and these can vary significantly between various financial institutions. Details such as how many loans you have and whether or not you make your payments on time are factored into your credit score.
For many people, the first time they actually learn their credit score is when they are denied a loan. However, many people who should have an otherwise outstanding credit score might suddenly learn that their score is being lowered by inaccurate information being reported to the credit bureaus.
This can be due to as small a mistake as an incorrectly typed social security number. In the worst cases, the owner of an account may be missing payments that are causing your credit score to tank.
Improving Your Credit Score With Credit Repair
Removing the inaccuracies mentioned above is the primary goal of credit repair companies. The process of removing inaccuracies is a difficult one. Imagine telling a bank that you don’t actually owe them money, then telling them they’ll have to prove it themselves. This required reams of paperwork and countless hours spent on hold with each credit bureau and bank.
Getting the inaccuracies removed so your credit score can reflect your financial reality is just one part of the process. The second major type of assistance that credit repair companies offer is counseling you on best practices to improve not only your credit score but your overall credit usage.
Should You Pay Someone to Fix Your Credit?
Is it worth paying someone to fix your credit? You might think the only thing you’re getting when working with a credit repair company such as The Phenix Group is buying back your time. While time is valuable, what is more valuable is the incredible savings that can be gained when your credit score is at its best.
Simply by lowering your interest rate by a single point—from 6% to 5%—on a thirty-year, $300,000 mortgage can save you $60,000 over the life of the loan. That’s enough to put one nice car or two decent cars in your new two car garage!
Final Thoughts
While it may seem like a luxury, credit repair companies offer incredible value versus the savings you’ll gain over a lifetime of loans when you have a great credit score. They can help you understand how mortgage lenders think, what numbers they use, and how you can set the record straight.