Sometimes, credit problems can seem insurmountable. While the average consumer hopes to increase their credit score so they can shave a few percentage points off their mortgage rate or get a low interest credit card, there are many consumers whose credit rating essentially excludes them from the credit game entirely. They are being denied loans at any interest rate and the dream of owning their own home is nothing more than that; a dream.
It is people in this category that have lost hope and begin to look to illegitimate methods of credit repair. They start looking into credit repair clinics who promise a way to completely start over. Clinics who claim to be able to create a brand new credit identity and a brand new credit report – clinics that seem to have the perfect solution to a hopeless situation.
Most people realize that when something sounds too good to be true, it usually is. Even the people who fall for these credit repair scams probably know the clinics that provide these services are not to be trusted. But when faced with the prospect of having a repossession, foreclosure, or bankruptcy on their credit reports for years to come, they become desperate enough to do things against their better judgment.
Transcript from the video
Welcome back to Lexington Law and our credit webinar series. Today we’re going to talk about what makes up your credit score.
There are 5 different factors that we know of that build up your credit score. The largest and biggest one at 35% is your payment history. Next at 30% are your amounts owed. From there at 15% we’ll discuss your length of credit history. And then your 2 last components, at 10% each are: Types of credit in use and your new credit.
As anyone who has researched credit repair to any degree has heard, you absolutely have the right to repair your credit on your own. In fact, Dr. Randy Padawer, who co-wrote the best selling “FICO® 850” seminar for The Motley Fool and acts as a consultant for Lexington Law, became a credit expert by becoming an uber-do-it-yourselfer when it comes to credit repair.
You have probably also read that you can dispute the questionable negative items in your credit reports for free. The credit bureaus even provide a form on their websites to make this process easy for you.
Something that you likely will not hear as often is that repairing your own credit is rarely as easy as it initially seems. On its surface, credit repair seems to be a simple process. You obtain a copy of your credit reports, identify the inaccurate items they contain, dispute them with the credit bureaus, and wait for the bureaus to perform their investigation. Of course, if it really were that easy, there would be no reason for Lexington Law or any other credit repair organization to exist.