What is Credit Repair?
Credit repair is one of those popular buzz words that everyone seems to be talking about ... even though many of them are not talking about the same thing.
According to some, credit repair is narrowly defined as disputing the negative items in your credit reports. Others take this definition a step further and define credit repair as working to remove the negative items from your credit reports through credit bureau disputation and creditor disputes.
In direct opposition to these people are those who do not believe it is possible to be proactive about removing negative information from your credit reports. These people either feel that credit repair is an outright scam or that the only method of "real" credit repair is to manage your credit and wait for your credit to improve naturally.
Aside from these tow groups who focus on credit repair as being linked exclusively to the items in your credit reports are a number of companies and service providers who imply that their financial service falls under the category of credit repair. Debt consolidation companies, credit counseling companies, and even credit card companies are making the claim that their services are akin to repairing your credit reports.
What Credit Repair Really Is
The truth about credit repair is that all of the above are correct. Credit repair cannot be defined as a singular tactic for increasing your credit score.
For starters, your credit score is comprised of multiple variables. Negative items on your credit reports, your payment histories, and your current debts all play a part in determining your credit score. Simply targeting one of these areas is not credit repair.
In addition, credit repair does not have to be defined as improving your credit score. You can have a great credit score and still be on the verge of financial peril if you do not have emergency savings, stable income, and predictable debts. Keeping this in mind, credit repair is perhaps better defined as improving your overall financial health.