Use these five websites to fix your credit score and get out of debt in months
When I first started writing about credit and online loans, it seemed like everyone was just out to make a buck. Every website I reviewed only offered high interest rates and overpriced credit monitoring services.
Fortunately, over five years running this blog, I’ve been able to find the resources that actually want to help you take care of your finances.
Now that doesn’t mean they don’t also charge for their services. I’ve yet to find a good credit repair service that is also free or an online lender that doesn’t charge interest on its loans. What I have found are the websites that offer real tools for fixing your credit score and a fair rate on personal loans.
I’ve highlighted five of these websites here to help you get started. You might not need all five. I’m starting off with a couple of sites to help fix your credit score and see your free credit report, and that might be enough for some. I’ll finish with a couple of websites to help repair your credit and get out from debt if it’s burying you alive!
Websites to Get Your Credit Score and Report
The first step in fixing your credit is actually knowing why your FICO is so low. That means taking a look at your credit report, all the bad marks reported and what you can do about it.
Remember, you have three different credit reports. Three credit agencies collect information on your debts and payment history. They sell access to your report to lenders to check your credit when you fill out a loan application.
That means you never know which credit report a lender will look at; TransUnion, Equifax or Experian. Most of what is on each report will be the same but you need to check each one to make sure there are no mistakes.
While it’s true that everyone is entitled to a free copy of their credit report once a year, you won’t be able to see your credit score and it won’t help if you’ve already gotten a copy this year. If you do need to check your credit, the credit bureaus each offer a service to get your report and score for free.
TransUnion offers a free trial of its credit report service if you ‘friend’ its Facebook page. Besides the free report, you get access to the company’s CreditCompass program which offers tips to improve your score as well as one million dollar ID theft insurance.
- Email updates of changes to your credit reports
- Personalized debt analysis to tell you when and where your debt is getting out-of-hand
- Unlimited toll-free access to ID theft specialists
TransUnion offers a free 30-day trial for its service, cancel anytime in the first month and you won’t pay a dime. Try it here.
Experian offers a similar service, giving you instant access to your FICO scores from all three credit bureaus and credit monitoring against identity theft. You get email alerts and the ID theft insurance along with access to fraud specialists.
Experian also offers a 30-day free trial and the monthly service is a little less expensive compared to TransUnion if you decide to keep the ID monitoring. I’ve used TransUnion for a few years but am thinking about switching to Experian for the cheaper program. Get your report and 30-day free trial here.
Once you’ve got your free credit reports, you can check them over for mistakes and the marks that might be holding your credit down.
- Each credit bureau has a Disputes department that investigates mistakes on your report. You can file a dispute online or through their credit monitoring programs. Creditors have 30-days to respond to any disputes of mistakes on your report or the mark is taken off, increasing your score.
- Even if a bad mark on your report is not a mistake, you might be able to get it removed if you negotiate with the creditor. Contact any lenders, credit cards or other creditors that put bad marks on your report. Offer to pay your debt in full if they mark the item ‘Paid in Satisfaction’ on your credit reports.
Don’t forget, anything you do to one report, you need to do it to all three credit reports. The credit bureaus don’t generally work well together so just because you get something removed from your TransUnion report, don’t expect it to automatically come off your other two credit reports.
Websites to Help You Out of Debt
Credit card companies and other creditors spend billions a year to hook you into debt, making sure you stay a slave to high interest rates. Unfortunately, the people there to help with credit and debt counseling aren’t as obvious.
Type ‘debt counseling’ into Google and you’ll need to scroll past dozens of for-profit companies before you get to real non-profit organizations set up to give you honest counseling services. You’ll find most of these through credit unions, religious organizations and other aid groups.
Even many of the seemingly legit credit counseling websites are for-profit debt negotiation services so it’s important to know where to look.
USA.gov offers some information on where to find legitimate debt counseling as well as links to file a complaint against a credit counseling company. The site recommends only those companies accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).
I’ve personally used CuraDebt, a debt relief service out of Florida, and the company offers a free consultation to see if debt negotiation is right for you. The service representative will help you estimate how much you can save by negotiating your debt, how many months it will take to resolve and find a monthly payment you can afford to pay it off.
While I’ve used debt negotiation services in the past, it’s not for most people. The way these companies work is they will tell you to stop making payments on your debt. That gives them more leverage to negotiate a lump sum payoff with the creditors but destroys your credit further.
Honestly, about the only thing worse for your credit than debt negotiation is flat-out bankruptcy so only consider it if you have no other way out.
Websites to Get a Personal Loan and Consolidate Your Credit
A better option is to consolidate your debt, getting a loan to pay it off and then making one monthly payment to pay off the consolidation loan. This is what I ended up doing in 2009 when it because clear that debt negotiation wasn’t for me.
The way a consolidation loan works is you apply for a personal loan on one of the sites below. Each will do what’s called a soft-pull of your credit so it doesn’t affect your credit score. You’ll find out if you’re approved and get an estimate instantly.
Once you fill out the application, it usually takes about a day or two to get the money deposited in your bank account. You can use your personal loan to pay off credit cards, other loans or anything you need to pay. This does quite a few things to your credit that will increase your FICO score.
- Moves debt from ‘revolving’ type associated with credit cards that hurts your score most to ‘non-revolving’ which has a fixed payoff date.
- Gives you one monthly payment instead of several and a monthly amount you can afford to save you from late fees and missed payments.
- Changes your debt to fixed-rate so your interest rates don’t increase as with credit cards.
After destroying my credit score in 2008, I couldn’t get a loan from a traditional bank. It was only through online lenders that I was able to get the money to pay off my credit cards and other bills and lower the monthly payment to something I could afford.
PersonalLoans specializes in bad credit borrowers and will accept applications from borrowers with a 560 FICO score. The site is actually more of an aggregator, shopping your loan out to a network of lenders, rather than a lender itself. This means your application goes out to different companies and for different loan types like peer-to-peer to make sure you get the best rate available.
You can borrow up to $35,000 on PersonalLoans and can apply in any state. Check your rate on a personal loan here.
BadCreditLoans is another option if you don’t qualify on other loan sites. The website tends to charge higher interest rates but will also accept borrowers with lower credit scores than most. They truly stand behind the name ‘Bad Credit Loans’.
Just as with the other online lenders, BadCreditLoans does a quick soft-check of your credit to estimate a rate and approve your loan. You can borrow up to $5,000 though most lenders will cap your loan at $1,000 and length tends to be shorter as well.
Paying off your other debt with a consolidation loan will almost instantly start improving your credit score. You’ll build a good payment history each month you make payments and you’ll be cleaning up your credit report.
There is one last tip I want to offer about getting a consolidation loan, how to get the lowest rate possible. Even though personal loans are generally cheaper than credit card debt, the interest rate can still be high so you’ll save money with every percentage point you don’t have to pay.
- Apply for the shortest-term loan you can afford. If you can afford the payments on a one-year loan, you’ll be offered a lower interest rate and be more likely to get approved. Your monthly payment might be a little higher because you’re paying the loan off faster but you’ll save thousands in interest.
- Apply for the lowest amount you need to get back on your feet. Not only will getting a smaller loan mean lower monthly payments, you’re more likely to be approved and less likely to fall behind on repaying the loan. You’ll get a lower interest rate compared to a larger loan and will save money.
Fixing your credit and getting out from under debt doesn’t have to be an impossible task. I know it might seem like everyone is out to keep you in debt and paying interest but there are actually some websites that will help you get back on your feet. Focus on fixing your credit report and score first so you can get lower rates on personal loans to consolidate your debt. Then you’ll be on your way to a lower monthly payment and building the credit history that will give you good credit.