Should You Get Credit Repair Services or Credit Counseling?

Dayton Uttinger  | 

Your credit score is in serious need of a boost. Whether you’re an aspiring homeowner, looking for a loan, or just want a solid financial portfolio all around, you know that your credit is important. There’s a lot of reasons that your credit might be suffering, and credit can be especially difficult to improve. However, what’s most important is that you’re ready to reverse the trend. Credit repair and credit counseling are two different ways that you can fix your credit, but one might be better for you than the other.

Choose Credit Counseling for Long Term Improvement

Credit counseling is your best shot if you don’t know the first thing about credit or finances. Credit counselors will review your finances and give an expert’s opinion about what you should do. Of course, this can only be as perfect as the information that you give them. If you’re looking at your finances and just wondering how to make it all work, then a credit counselor can be a great solution, especially because many of their educational materials are free.

Furthermore, if you have help paying back various debts, credit counselors can help with that too. Credit counseling agencies often offer a debt management plan (DMP). While a DMP is not for everyone, it can be very effective in getting you out of debt. If you enroll in a DMP, you deposit money with your credit counselors, and then they pay off your debts using that money. If you are having problems budgeting your money properly, then DMPs can be a way to make sure that you’re not spending money you don’t have.

Many lenders will also agree to lower your interest rates once they learn you are working with a credit counseling agency. It shows a degree of responsibility and lowers your risk as a borrower. This can be a tremendous help if you have several outstanding debts that you’re struggling to pay back.

Choose Credit Repair for Quick Fixes

While credit counseling is helpful to those who are trying to pull themselves out of a cycle of debt, credit repair is mainly useful to those with errors on their credit report. Credit repair can do very little if your report is damaged by bad purchases or late payments. Instead, credit repair helps out victims of identity theft or credit reporting errors.

You might have debt that hurts your credit score multiple times, when it should only impact it once. Perhaps the debts of an ex-spouse are still showing up. Whatever the case, if your credit report is reflecting information that is factually wrong, then credit repair agencies are experts at negotiating with your creditors to remove it as quickly and efficiently as possible. If the damage to your credit has less to do with the choices you made and more with the choices that you didn’t, credit repair is likely the better option for you.

The Verdict

Credit repair might be attractive because it absolves you of some responsibility. However, unless the items on your credit report are the result of an error, you’re better off learning how to pay it off as responsibly as possible from a credit counselor. Furthermore, a credit counselor will likely cost less than a credit repair agency, since the former tends to be nonprofit.

Although they may sound similar, credit counseling and credit repair provide two different services to people in different financial situations. Both groups of people are clearly struggling to fix their credit, but the root cause is different in either case. If you really want to better your credit and your future financial prospects, pick the option that targets the cause of your problem rather than just the end result.

Looking for more information on how a credit score is calculated? Visit the Fiscal Tiger credit score resource center.


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Dayton is a chronic Wikipedia addict, which is detrimental to her social life but stellar for her writing. She resides in Boise, ID, surrounded by her own frantic outlines, highlighted encyclopedias, and potatoes. The latter was not by choice.

This post was updated December 14, 2017. It was originally published October 15, 2017.