Every so often, I come across a Sponsored Ad for credit repair or a social post soliciting people to sign up for help with their credit score and I shake my head. Don’t get me wrong, I’m not against paying for credit repairs just because Dave Ramsey said so. I’ve been against paying for those services even before we stepped into a Financial Peace University class. But let’s be clear, Dave Ramsey’s principle includes not having a credit score in the first place. So from his perspective, you should be working towards having no debt or credit at all.
My husband mentioned in his post, The Stubborn Mule, how he paid off debt and cleaned up his credit. We did this without ever paying anyone else to do it. These days, he is very proud of his credit score and is proactive in keeping it where it is. Here are the three reasons why we decided that paying someone for credit repair was not for us:
When my husband and I sat down to come up with a game plan on paying off some debt and repairing his credit score, paying someone else to do it was never an option. Why you ask? We didn’t see the sense in paying for a service that we could easily do on our own. Credit scores are a reflection of how good or bad you’ve been with managing money that you borrowed. Literally, if you dig yourself out of a hole, your arms are more likely to be strengthened in the process. Your patience to dig will be tested based on the depth of the hole, but you may walk away with more endurance and willpower so you don’t end up in that hole again.
Dave says, “You can wander into debt, but you can’t wander out.” I agree so much with that statement. It’s been proven time and time again that getting into debt is easy, but getting out takes discipline. When we pay for convenience we’re looking to save time, but does convenience guarantee a lesson learnt?
- We Didn’t Buy Into False PerceptionsPeople will have you believing that credit scores are so complicated, but they really aren’t. In my post, 3 Reasons Why You Should Avoid Being A Co-signer, I talk about factors that go into determining your credit score. The key is be diligent in paying off debt, stop creating new credit during this pay off time, getting rid of too many lines of credit, and managing payment expectations with creditors.
A myth that needs to be dispelled: I need to open several lines of credit to build my credit score quickly. The reality is that my husband got rid of most of his credit cards and now has good credit. Don’t get me wrong, when you close lines of credit your score will take a dip. That’s the nature of FICO; and since none of us know their algorithm on how things are weighted, we don’t need to put energy into such things. Instead, focus on what needs to be done. My husband cancelling lines of credit he didn’t need and paying off existing debt excited him a great deal as he watched his credit stabilize.
- No Pressure
Oftentimes when I hear people contemplate whether or not to hire help with their credit score, it’s because they’re under pressure. Many times it’s self-inflicted pressure to buy a house, furnish a house/apartment, or buy a car that’s driving a quick fix. If you ask my husband, he’ll tell you that the last thing you need is to rush the process. The reason we were able to rebuild his credit was due to never adding any pressure of a big purchase or timeline to have it done by. The focus was to pay off the debt and, in doing so, form a spark of discipline; and through that process, the credit score began to rise. Did we need things that required a good credit score? Of course! Even though we both have good scores, we still aren’t pressured to do any extra things to maintain them. We keep things steady and the only thing that disrupts the flow is when we pay existing debt off. But guess what? The credit score stabilizes eventually.
To be clear, a great credit score does not represent financial wealth. A great credit score just means you manage debt at an acceptable level. Just do the work and talk to creditors that show negatively on your report. Manage their expectations on when you can pay. If they don’t make the cut that month, just call them up and let them know. If it’s an incorrect filing on your report you can dispute it yourself. Don’t get discouraged and think that you can’t be successful doing this on your own. If you ever second guess your choice in not hiring a credit repair company, think on these words from Dave.