What You Don’t Know About Credit Reports
Improving your credit score is something everyone tells someone with bad credit to do. The next question then would be how. The most obvious answer of course is get your credit report and begin managing your debt. We suggest that you seek information that will help you in repairing your credit. Just as you would contact a medical doctor, if you were having symptoms of sickness. You would contact a credit doctor to assist you with your credit repair. Contacting a reputable credit counseling agency that reports your progress for you to the credit bureau, however, may not be the wisest solution. A credit counseling agency generally reports directly to the credit bureau so their name and contact information may be listed on your credit records. Having credit counseling references recorded on your credit records may deter lenders from extending you further credit. As it appears that you already have a problem with debt, so why would they offer you more credit. First seek out a reputable credit agency that has a proven track record and actual testimonials of their client’s success. Secondly, consider using the advice of this agency or a credit counselor, but following up on that advice yourself rather than have an agency report your credit repair progress to the credit bureau.
What is FICO
FICO is a way of reporting your credit with a score within a range of 300-850 with 300 being below standard, 500 being poor, and 700+ being A+ credit. FICO stands for Fair Isaac Company credited with creating this scoring method from the information in your credit report. According to myFICO.com 90% of lenders use this credit scoring system. It would be a good idea to know your score. This score determines what APR you will receive for a mortgage or auto loan. Therefore it determines how much your monthly payments will be. For a score of 500-600 you may pay 3% or more in interest per month than a neighbor buying the same item with a credit score of 700-800. This cost someone with a low score thousands more dollars a year for the same item. Needless to say some credit card companies and other lenders to those with bad credit take full advantage of this information to charge extremely high interest rates.
How Long Does Credit Reporting Remain on Record
At the end of seven years most debts are cancelled. The adage time heals old wounds applies even to credit scores as derogatory information such as slow pays, etc., will be removed from your report after seven years. Reports relating to good credit standing are generally retained on your records. Once these damaging entries are removed from your report. Your credit score should improve your credit repair efforts. Be careful to make timely payments and watch for error reporting.
How Can I Correct Errors on my Credit Report
The best way to address errors once you obtain copies of your credit report from all three credit bureaus (see below) is to write each of them. Document all of the errors and write out your dispute with the report along with copies of any proof you may have. Also contact the creditor that made the error and do the same. Keep copies of all your correspondence and follow up to ensure the corrections have been made. Credit repair efforts may improve your score after these corrections have been completed.
Removing Bankruptcy from My Credit Report
Have you looked at your credit report lately. You are entitled to a free report once a year depending on specific requirements relating to your personal credit history. Contact Experian.com, TransUnion.com, or Equifax.com. If you have filed bankruptcy, according to these credit bureaus your credit report will continue to list this information for ten years. Though you cannot remove the bankruptcy information, you can add a clarification by detailing the circumstances that surrounded the decision to file. A lender may take into consideration this information in determining your creditworthiness. If for example your bankruptcy was due to a life threatening accident and lengthy recovery that caused you to lose your job. Now that your health is restored there may be little or no chance of this recurring; therefore a lender may be willing to extend you credit.
A. Johnson (Tonimaree), Director at Business Business Content Publications, writes SEO content articles, technical documents, and reviews for online sites (over 15 years). http://ToneeJohnson.com
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