Nowadays, with identity theft rampant and possibility of data entry errors it is a high probability that your credit report contains entries that do not belong to you. Incorrect items on your credit report will negatively impact your overall credit score which in turn will cost you thousands of dollars of interest when you get loans for your car or house. The better your credit score, the more favorable interest rates you will receive from the banks and lenders, which means direct savings to you. So credit repair is a good option.

Why is my credit score so important?

Banks, lenders and credit card issuers use the credit score as a universal means of assessing your credit risk and credit worthiness. The credit score is calculated by the three major credit reporting bureaus (TransUnion, Experian and Equifax), and is a reflection of several factors, including your past payment history, on time payment record, amount of loans you have, etc. When your credit score is high, lenders are willing to issue loans to you at lower interest rates. And the lower the interest rate, less money you will pay in interest on your loan. On a big purchase like a car or a house, relatively small reductions in interest rate could mean thousands of dollars in savings to you. In addition, some people with excellent credit scores can even qualify for a no money down mortgages.

Why do-it myself?

Hiring a reputable credit counseling company to assist you to improve your credit report could cost you upwards of $1,500. However, there are many firms that make big claims but do nothing to help you. Hundreds of thousands of dollars in fees are lost each year by consumers choosing the wrong credit counseling company. For a substantial fee, these credit counseling companies claim the ability to repair your credit with a snap of a finger. Unfortunately, many of these companies are a fraud or shaky reputation at best - they do nothing to improve your credit report and disappear with your money. The Federal Trade Commission (FTC) puts out a brochure titled, "Consumer Tips: Self Help May Be Best". In that article FTC strongly recommends that consumers not take the risk of hiring someone and save their money. They further suggest that consumers educate themselves with the repair process and take the responsibility of repairing their credit into their own hands.