There are many people in our country today with bad credit that don’t even know it. In fact, most of these people won’t even find out until they apply for credit and are denied.
Will you be next?
Whether you know you have bad credit or not, there are steps you can take to make sure your credit is moving in the right direction.
Order a copy of your credit report. By law, you are allowed one free copy of your credit report from each of the three major credit bureaus per year. Make sure you that advantage of this. Either order all three at once to get a complete picture of your credit or stagger them throughout the year to keep an up to date picture. Review your reports with a fine tooth comb. Make sure to take your time and pay attention to every detail. Check your personal information for misspelling and wrong numbers or addresses. Review your credit accounts for proper dates and amounts. Make sure you recognize all the accounts listed on your report. Identity theft is a growing problem, don’t be a victim. And take a look at who else has been looking at your credit report. Dispute information that doesn’t belong there. While going through your reports, make a detailed list of all the information that is wrong or items that should no longer be there. Keep a copy of this list for yourself and send a copy of it, along with your credit report, to the corresponding credit bureau. Then all you can do is wait. A credit bureau is required by law to investigate all disputes and reply within thirty days. If any changes are made, they should send you an updated copy of your credit report. File a dispute with the creditor. If you know the information is wrong and the credit bureau investigation did not change anything, file a dispute with the creditor that listed the item. The process should be similar to filing a dispute with the credit bureau.
Remember, it’s your credit. It’s up to you to fix it.
By: K.M. Aguglia
Posts Tagged ‘Three Major Credit Bureaus’
Negative Credit Repair Help
February 4th, 2010Credit Repair Scam – How To Avoid Being A Statistic?
February 2nd, 2010
A good credit history is critically important for the consumer. A bad credit will prevent you from getting a business loan, owning a home, or even a job. Promises to “fix” your credit are always made by credit consolidation companies, but they are seldom true. Here are some of the important tips to avoid scams:
First things first. Negative information cannot be erased if the information is correct. Only inaccurate information can be corrected in your credit file. Credit file information remains on your record for seven good years from the time it is reported to the bureau. For bankruptcy, the information remains on your record for ten years. All the consolidated information about your credit bills you fell behind on, but are now paid, will remain on your report for the time period mentioned above.
Do not pay the credit repair company unless their promises are kept. Remember, the law is on your side. Federal law requires credit repair companies to give you a complete detailed explanation of your legal rights, a completely documented written contract, and above all, 3 days to cancel. This applies to all credit repair services including for-profit services, non-profit services, creditors and credit unions.
Be wary about emails you receive. When you hover your mouse over the link in the email, you will know for sure if it is a trusted website or a fraudelent one. If fraudelent, report it to your bank promptly.
You don’t need a counselor to correct your mistakes in the credit report. Take charge of it yourself. If you were recently denied credit, you can request a free credit report. Otherwise there is a small charge for it. Some states will allow you a free copy of your credit report once a year. It doesn’t cost you anything to dispute or question items in your credit report. Get online or follow instructions from your credit bureau. The three major credit bureaus are Equifax (800- 685-1111), Experian (800-682-7654) and Transunion (800-916-8800). In most cases you will need to contact all the three credit bureaus as the information they have about you may vary.
Remember that you can’t create a second credit file. Some of the fraudelent companies will offer to provide the consumers with a different social security number (tax identification number if ssn does not exist) in order to create a new credit file for the consumer. Such a practice is called as file segregation. File segregation is illegal and does not work.
Whereever possible, add explanation to your credit report to prove your point. If you have legitimate reasons for not paying certain bills on time (switching jobs, illness), or if you refused to pay because of a dispute, send the bureau a statement to be tagged with your credit report. Each lender who pulls your report will be aware why you fell behind on those bills.
Counseling might be a good option. Find a good non profit consumer credit counseling service in your neighbourhood. Get online or open your yellow pages to find one. Seek the guidance of friends and family members. Select a counselor, meet them in person to make sure they are right for you. Ask them on tips and advice on how to build a good credit history. If you are still lagging behind on your payments, credit consolidation firms will be able to set up a payment plan with your creditors. If money is an issue, select a non profit credit counseling service. They will offer their service for free or for a very low cost.
By: Bill Smiths
Does "Credit Repair" Really Work?
January 27th, 2010
There are a lot of “credit repair” companies out there, and they promise a lot. How good are their promises, and what can they really do for you. We will take a look at the realities of the credit repair business in this article.
Credit Repair involves a company contacting the three major credit bureaus for you, on your behalf, and disputing derogatory items on your credit report.
Understand this, first of all: the purpose of the three major credit bureaus, Equifax, Transunion and Experian, is to accurately report a client’s credit and payment history to potential lenders.
They generally do a very good job of fulfilling this mission. If items are true, you really have no right to expect those items to be removed before seven years have passed, or, in the case of bankruptcy, ten years have gone by.
That being said, the credit repair companies basically exploit a part of the law, under the federal Fair Credit Reporting Act, which states that a consumer has the right to dispute any item they feel or believe to be inaccurate on their credit report. A disputed item can be presented to the merchant who granted the credit, and that merchant has 30 days to validate that that debt is correct. If the merchant fails, for any reason, to verify that debt as accurate within a 30 day period from the time the dispute is filed, then, by law, that derogatory item must be removed from your credit report!
In the real world, especially during the Christmas holiday season, merchants often do not have a chance to respond within the required 30 days and verify legitimate debts, so the credit repair company will then be able to have that derogatory item removed. Other merchants may have gone out of business, etc., so it is not necessary to wait a full 7 years to have that item drop off your credit report.
You as a credit consumer can dispute any item on your own credit report. Are you able to do that? Are you a good letter writer? Do you know how to navigate the complexities of obtaining and updating your reports? Some people can, some people cannot. The credit repair companies will do all this work for you. And they are good at it, they do it every day, all day long.
There are a lot of credit repair companies, however, that promise too much, and charge too much up front. Some companies want you to pay hundreds of dollars up front before they go to work for you.
A good credit repair company will charge you by the month. The first month may involve a small set-up fee in addition to the monthly fee. You are not committed to a contract, you use their services for as many months as they need to get your credit scores improved sufficiently. For example, $75 to set up and $49 a month, no contract.
Under the law, a credit repair company cannot usually obtain your credit reports for you, they will advise you as to how to obtain them, whether for a fee or free. You need to provide them with your credit reports that they can work from to begin the repair process.
Everyone has a right, under federal law, to a free annual credit report. Google this and you will find the site for this.
I am a mortgage broker and I deal every day with clients whose credit is not up to snuff, and I do have a credit repair company I refer clients to, and, 3 or 6 months down the road, they are in better shape and I can then help them get the loan they seek.
As always, seek the advice of a certified financial planner or mortgage planner when you begin the credit repair process, so you can steer clear of the scammers and get aligned with a good credit repair company.
By: James Hussher
