Your credit score is an important part of your financial health. Having a low score or a bad score in Arkansas can prevent you from securing loans, getting a credit card, or in some cases, a bad score can keep you from landing a job. With the economy in such a bad state, a growing number of people are struggling to maintain a good credit score. Thankfully, there are some things you can do to work towards repairing your credit.
Arkansas is not an expensive state to live in. Not only are basic necessities cheaper than the national average, but housing is more than 20% cheaper than the national average. This might be why even credit card debt is much lower on average in Arkansas, being around $4,735 per person, which is approximately $400 lower than the average in the US.
Despite the lower cost of living, Arkansas has lower-than-average credit scores. The average credit score in Arkansas is 694, below the national average of 714. While the Arkansas averages are still considered good, they’re in the lower range of good. If you have a lower credit score, credit repair can help you remove false entries from your credit report that might be causing it to be lower than it should be.
In Arkansas, there is a state law that affects how credit repair organizations can operate within the state. The Credit Services Organization Act of 2017 (AR ST 4-91-201) dictates that all credit repair providers in Arkansas must:
Along with state laws, Arkansas credit repair providers also need to follow federal regulations placed on the industry. The main law impacting these companies and their customers is the Credit Repair Organizations Act (CROA), which dictates how these companies can present themselves and bill customers, as well as how the contracts need to be provided for every job.
No, you don’t need a lawyer for credit repair. In Arkansas, credit repair organizations can be individuals or companies, but they’re not required to be lawyers or have any legal qualifications at all. Since the credit repair process is not a legal matter, there’s no need to hire a lawyer for it unless you find one you want to work with. A regular credit repair company is perfectly able to provide the same service without any problems.
It makes sense that if you are having trouble keeping up with your existing bills that you should also make a point of limiting your spending. One way to manage your money more effectively is by not using credit for purchases. Instead, stick to cash or use a debit card to prevent adding even more debt onto an already overloaded credit report. Plan your purchases before you go to the store and only take enough money with you to cover your list. This will help you cut down on impulse spending which can help you save to pay down or pay off existing overdue accounts on your credit report. When you do make a list before you go shopping, make sure you limit your purchases to items that you need as opposed to items that you want but can live without for the time being.
The more accounts you have, the more tempted you will be to spend. In some cases, people will end up using one credit account to pay the other, which just leads to an endless cycle of paying interest. Unused credit cards or credit accounts should be closed. Closing an account will temporarily lower your credit score, but missing payments will be much worse. Any accounts that have no balance should be closed, or if you have an account with a very small balance, pay it off and then close it down. Accounts such as store credit cards and shopping sites like Fingerhut are some of the worse accounts to maintain if you are struggling with bad credit.
Once you have gotten a handle on your spending and have closed your extra accounts, now is the time to start repairing your credit. You can also rebuild your credit while you are repairing it by bringing your existing accounts into good standing and then maintaining them over the long haul. The credit repair process in Arkansas is done in 3 consecutive steps. This is how it works:
Before you can start the credit repair process in Arkansas, you need credit reports from all 3 major credit bureaus. Every 12 months, you’re entitled to a free credit report from all 3 bureaus, which you can request at any point throughout the year. Each credit bureau has its own report, so you need to request a report from all 3 credit bureaus, not just one. What’s more, if you have recently been denied a loan, line of credit, or credit card based on your credit rating; you can also request a no-cost copy of your credit report. Knowing what is on your credit report will arm you with the information needed to start correcting and repairing your credit.
After you’ve gotten the credit reports, you need to go through all of them and check for mistakes. Accuracy is a problem on credit reports, with a large portion of reports having at least one issue that needs to be corrected. Pay close attention to the information on open credit accounts as well as any data about late or missed payments. Check for some of the most common simple errors such as incorrectly entered payment dates, or inaccurate payment amounts. In most cases, a simple phone call to the company that reported the error could be enough to fix it. If not, you can file a correction dispute directly with the credit reporting agencies.
If you find any problems on your credit reports, you need to file a dispute with the credit bureau that has the error on their report. For errors that are on multiple reports, you have to file disputes with each of the credit bureaus where the erroneous entries are present.
Note: While it sounds simple to go through the credit repair process, it takes a lot of time and requires you to follow up with each credit bureau individually. You can technically do it yourself, but it’s tedious and could end up costing you a lot more time than you think.
Pay off the smaller amounts listed on your credit report. If you have trouble paying larger bills, set up a payment plan to avoid collection marks on your report, these have the worst effect of all.
Most credit repair companies in the Natural State will do the same things you can do on your own, however the process should be much more streamlined as they have likely done it thousands of times before. In addition to these, however, they will often work with your creditors to help lower and pay off the debt listed on your credit report. After completing the dispute process and ascertaining that amounts are actually correct and owned by you, they will suggest moving your higher interest rate cards over to your lower ones. This can save you money as well as lower the amount of total debt. They also will work with high overdue balances placed in the collection to try to get them settled for a smaller amount. This will help your overall score improve as the collection marks begin to drop off.
Credit repair companies in Arkansas do help many people with their services being that they have experience in the field and often a good track record with the creditors they are contacting on your behalf. This service is not free, and most charge an upfront fee. Be wary of credit repair agencies that boast of 30-day credit repair schemes, they are often scams rather less than savory companies that charge you without actually helping you to improve your score.
Depending on whether or not there are inaccurate entries on your credit report, credit repair can make a huge impact. Any false entries could be dragging your credit score down by a lot, especially when you consider that your payment history is worth 35% of your FICO credit score! Having these inaccurate entries removed could cause your credit score to go up by a lot in a short time.
The prices that credit repair companies charge vary a lot depending on what the company is offering. Some will charge a one-time setup fee between $99 - $199, followed by a monthly charge of between $99 - $249 as long as you keep the service active. Others will skip the setup fee in favor of only charging a monthly fee. The average monthly fee for credit repair service in Arkansas is around $150 per month.
In Arkansas, credit bureaus must respond to disputes within 30 days. This doesn’t mean that credit repair will take 30 days, but this is the upper limit for the investigation and initial response. There may be some follow-ups that take place after this time, especially if there’s an issue during the process. On average, credit repair is expected to take 3-6 months.
Credit repair can be done anywhere in the U.S. While you’re more likely to find credit repair companies in Little Rock, Fort Smith, Springdale, or Jonesboro, there’s no reason why you couldn’t also get credit repair service if you’re in Newport, Alma, Prescott, or Genoa. As long as the credit repair company follows state and federal laws, they’re able to operate anywhere in Arkansas without a problem – even if they are not physically based in Arkansas.