If you’re struggling to fix your credit – even to raise scores higher – chances are you might be doing credit repair wrongly. Do you know how to read your credit report? How about the do’s & don’ts of credit repair? If not, proceed to read further on how to enhance your techniques in repairing bad credit here.
Introduction: Dos of credit repair.
The best option to improve your credit score – remove negative items, clean up credit reports, delete obsolete information and more – is to fix your credit report. Learn more about 5 things to consider when doing up your reports.
#1 Know who performed credit inquiries on your report.
Good or bad – it’s crucial to learn on who is doing credit inquiries on your credit report. If not, you’ll be left out not knowing why your credit score dropped badly or banks not accepting your mortgage loans. Find out on who usually inquires on your report card.
Generally, you find a trend of who is doing inquiries on your reports in Figure 1.0 below:
Figure 1.0 Statistical Analysis of Original Creditors & Lenders
|Common||Financial institutions (Banks, insurance agencies, credit unions & credit card companies).|
|Uncommon||Micro-credit agencies (Savings & Loans associations) & Credit bureaus.|
|Seldom||Proprietary firms (Moneylenders, Peer-to-peer lending & P.P.P.).|
|Never||Creditors (after 10 years of bad collections & charge offs).|
Potentially, your creditors might invest money in hiring debt collection agencies. It’s okay to negotiate with debt collectors for better rates. Do not be afraid to call up collections companies as the primary goal is to recover bad debts. For other inquiries, you can call the banks for financial assistance (such as debt settlement, credit card consolidation or even credit counseling).
Note: You’ve to be clear on Fair Debt Collections Practice Act (FDCPA) to refute claims.
#2 List out errors & discrepancies in your credit report.
Spare some time to list out errors, mistakes or discrepancies in your credit report. It is not always your fault but such issues do harm your credit score. There is no “perfect” credit report. Common problems are found lodged by a creditor, financial institution, credit bureau or collection agency.
Find out some of the worst problems you can face in Figure 2.0 below:
Figure 2.0 Problems Associated with Financial Institutions, Lenders & Creditors
|Negative items||Original creditors, lenders or collections companies.|
|Verified information||Creditors, debt collectors or banks.|
|Insufficient info||Credit bureaus|
|Litigations||Lawyers, bankers or judges|
The importance of identifying credit report errors cannot be omitted. When you purchase a credit report, from annualcreditreport.com or elsewhere, do a detailed credit review on the items listed and ask for assistance from any parties; friends, relatives, consultants or bureaus.
Note: No one is 100% right on fixing your credit reports, remember.
#3 How does the number of negative items for disputes affect me?
If you have many negative items listed in your credit reports, the scoring model naturally scores you lower than your peers – the higher the number of items, the lower you scored on your reports. A negative correlation has been found in Experian credit survey.
After deciding on the number of negative items to be disputed, you’ve to ensure that the items are not deemed frivolous else facing rejections. Here is a guide on how to file for disputes accurately in Figure 3.0 below:
Figure 3.0 Dispute Management & Conflict Resolution Process
|Few negative items||May do a credit fix on your own.|
|Some negative items||May need some credit help from friends or relatives.|
|Many disputes||Hire the best credit repair companies.|
|Unlimited disputes||Get the highest tier of service for unlimited credit disputes.|
Credit reporting companies allocated time in management of disputes, retrieval of information, settlement of court judgments, or liaising with creditors. It may take up to 30 days for your original creditors to respond and more than 60 days for an update of info.
Note: Unlimited disputes don’t mean complete removal of bad objects in your credit report.
#4 Asking for 2nd opinion from credit repair specialist.
Not everyone knows the answer to their problems. Sometimes, it’s best to seek advice from third-party service that has the experience to address difficult-to-dispute concerns. Asking for 2nd opinion is usually the safest way to improve your credit score.
You can seek advice from relevant authorities – credit repair consultants, credit counselors, credit bureau officers and other governmental officials – in order to manage a good mix of debt. Do not ask a data analytics company or third-party vendor to review your credit report.
Note: 2nd opinion is proven to be a highly effective credit fix solution for most people.
#5 Include a credit shield protection plan.
When you realized the potential loss behind identity theft, it’s too late for legal remedies as your personal data has been leaked to third-party companies. Credit protection is needed even before you consult any local agencies for financial assistance.
Check out preventive measures using credit monitoring & identity theft protection in Figure 5.0 below:
Figure 3.0 Dispute Management & Conflict Resolution Process
|Problem||Personal credit file exposed to credit bureaus, credit repair companies, creditors or miscellaneous firms.|
|Solution||Request for a freeze in credit report.|
|Preventive measures||Call the police. Invest in credit monitoring service, fraud alert and other credit shield plans.|
|Further prevention||Sign up for identity theft protection & ID-Theft locked plans.|
Exposure of information to public registry and credit bureaus often faced data hacks and security breaches, i.e. 2017 Equifax database compromised. It’s imperative to invest in the best credit repair companies offering identity theft protection, credit monitoring and personalized data protection services.
Note: Global databases are being compromised on a daily basis, secure your info now.
People also ask:
Quote of the Day: “Prevention is better than Cure – KIG Hall [2013-2018]”
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This article was originally published on January 02, 2014. It has since been updated.