How To Fix A Bad Credit Report
It’s a fact; your credit report serves as a snapshot of your financial well being. If you have a bad report or a low score, then there goes your financial health. A credit check is like a report card of all your dealings with your lenders (banks, credit card companies, stores etc.). Most importantly, it’s a measuring stick of how good you have been with your lenders in terms of payments. Your get credit score (rating) gets dinged every time you are late on a payment with any lender. How much your credit score is effected depends on whether the payment was 30, 60, 90 days late or if paid at all.
Now we must keep in mind that credit reports are essential for financial security. These reports are used by banks, credit card companies and loan officers to assess whether to lend you money or not. So in essence, if you have a bad report or a low score then they might deem you as a risky borrower. Moreover, now more then ever your credit report is used to judge your trustworthiness. Potential landlords check your credit, and employers have begun looking at credit as well of potential employees. Some employers have even set a requirement to have certain minimum credit score in order for applicants to be employed.
All in all, having a good credit score is trivial in today’s society because a bad report or score can have tremendous impact on your life.
What consists of a bad credit report (negative score)?
• Outstanding credit card debts that are overdue
• Bank loans not being on time
• Foreclosures
• Repossessions
• Chapter 13 Bankruptcies (remain part of your credit report for 7 years)
• Chapter 7 Bankruptcies (remain part of your credit report for 10 years)
• Tax liens
Important
Over the past several years, there has been increasing reports of people spotting mistakes in their credit ratings. They had bad credit ratings turned good by correcting them. Since identity theft and proliferation have become a norm, there are tons of mistakes your credit report can have. Now correcting credit history can be difficult for some individuals and that’s mostly because they are not aware of the process. All it takes is some time to educate yourself and bingo, you have could have your bad credit report score reassessed and given its right fitting.
The first and initial step is getting your hands on some copies of your credit history. There are 3 main credit-reporting bureaus, TransUnion, Experian and Equifax. You need to contact them and get your latest credit reports along with your credit history. Once you have them in your possession, organize all your debts by date and track them back as far the credit bureaus have been tracking. At the very moment, do not worry about your older debt amounts and only focus on new debts (past 12 months). Try also to spot large debt amounts. If you can deal with the most recent debts effectively, then this will balance and portray any negative picture your older debts have on your credit score.
After going through all this, you might end with some disputed amounts. First things first are to contact the lenders/ creditors in question to reconcile the error over the phone. If that does not work, then a formal letter of complaint should be mailed to the account services department. Before you pursue option 2, make sure to attach to any relevant documents like receipts, agreements papers etc. for support.
The key is to be persistent in correcting your bad credit report. It can sometimes take a lot of phone calls, emails to get it corrected but the end result is worth it. Like mentioned, it is vital to have a good credit score and if you don’t, a lot of things in life could be at risk. Even if you think you have a good credit score, you should think again and obtain your latest score to be sure.
