Oct
11
Understanding Credit Information And How It Decides Our Borrowing Power
Filed Under Credit Card Debt
You can repair your credit information if you have the know-how and the tenacity. Often, it involves calling your lenders, creditors and collection agencies to barter and negotiate with them. You may have to send them a letter or hassle them every single month until an item is removed, but you can often get lesser items off your report. Things like charge-offs, collections accounts, settlements and late payments can all be negotiated. Sometimes, people hire a credit counselor or debt relief company to manage these negotiations for them. If you have a bankruptcy, foreclosure, lien or judgment against you, then this negative credit information will be on your account for 7-10 years without much you can do. But for the rest, you may want to micromanage a little to see what you can get.
Once you have your credit information, you should focus on improving credit scores. Check out your free credit score reports from Equifax, TransUnion and Experian. Credit reporting is voluntary, so the files may all be slightly different. Once you have this credit info, examine your reports for errors. Roughly one-third of credit reports contain serious errors because the credit bureau doesn’t verify the information your creditors send to them. Therefore, keeping clear credit is your responsibility. Some of the items may come off through a dispute, where you send a letter or a photocopy of your credit report with circles around the mistakes and supporting documents to validate your dispute. As for the legitimate blemishes, they’ll be on your credit for up to seven years and will likely only be fixed through consistent on-time bill payment. You can phase out the use of unneeded credit card accounts but do not close them. Simply stop using them and pay then off. Lastly, a secured credit card can help you re-establish regular on-time payment history again.
To file a dispute about your credit information, you should write a dispute letter to each of the three of the credit bureaus, which are Equifax, Experian and TransUnion. In your letter, include the date, your address and name, phone number and social security number. All you have to put is hat the data is wrong and can they update it and then list the wrong info and explain why its wrong. Attach a marked copy of your credit score report and include all previous communication, account records or statements that can help prove your version of events. By letter is the best way to dispute with Equifax and TransUnion, but Experian only allows online disputes. The credit bureaus then have 30 days to check and repair your credit information. Once they are done, they will send you a letter including what was or was not updated. If you’re not happy with the letter, then you can try once more with different documents or get in touch with the creditor to try and resolve.
Often, checking your credit information is the only way of finding an identity theft if you are don’t use one of the identity theft products such as Life Lock who monitor your credit information for you and look for any unusual activity. If you find strange in your credit information that you have positively no explanation for, a loan, a new TV on credit etc. get in touch with the 3 credit agencies as soon as possible and police for advice. Without any type of protection, checking your credit information is probably the only chance to avoid identity theft running amok. It cannot prevent it but at least it stops it getting worse.
Looking at your credit information can be daunting at first if you’ve had a back track record. The worst thing you can do is put everything off and wait for it to go away. If the creditors are really hounding you and you’re not sure how you’ll have the money to cover it all, then your best bet is going through a credit counselor or debt relief agency. If you have one or two bills that are behind or have paid most of your debts off and are just looking to start anew, then you can handle this. The last 24 months constitute 60% of your credit score, so you can turn things around this year simply by paying your bills regularly, in full and on-time.
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