The financial crisis has been extinguished, your wallet stopped hemorrhaging money, and you’re on your way to recovery. Now, after a period of financial strife, it’s more than likely that your credit score has dropped. The severity of the plunge depends on the particulars of your situation, but even a single missed payment will poison the score between 60 and 110 points depending on its value – and stay on your report for up to seven years, even if you make the payment as soon as possible. Let’s say you’ve made peace with that fact and vow to never miss your payments. Now, how do you plan to enforce your right to a good score?
The credit score is essentially the golden calf of American finance, impacting a lot of areas of your life. You know that it affects loan and credit card terms – but credit scores are increasingly being used by landlords and leasing offices to gauge your viability as a tenant. Keeping tabs on your credit score is simply good business.
The first step in any sane credit restoration strategy is keeping tabs on your credit reports from the Big Three: Equifax, Experian, and TransUnion. By law, you are entitled to one, free credit report from each of these three companies (which you can order through a single, central website). The report contains your credit history and while it may be full of painful reminders of financial problems, it’s your primary tool in setting things to rights.
Credit reports are generated automatically, but data is input by humans – and, as they say, to err is human. It’s quite likely that your report will include outdated information, such as mentions of missed payments that should no longer be there (mention of a missed car loan installment from ten years ago is a textbook case), or items that are plain wrong, such as erroneous reporting of missed payments or mentions of loans you’ve never taken out in the first place.
The latter are red flags that something has gone seriously wrong. At best, it’s just a misattributed loan. At worst, you’ve fallen victim to identity theft and will be paying the price for someone else’s actions. The only way to find out what is true is to dispute the entry with the appropriate credit reporting company.
You can contest entries on your credit card report directly with any of the three reporting companies. The company will then contact the data provider for verification. If it turns out that the information is in error or the provider will fail to respond within 30 to 45 days, it will be removed. Otherwise, the information stays on your report. As such, you cannot worsen your situation by disputing items on your report – you can only improve it.
And improving it is well worth it. Removing old information and cleaning up your report expedites the road to credit recovery. You’d be surprised just how many debtors neglect their credit reports and wind up with a credit score crippled by old debts and even bankruptcies that continue to stay on the record well past their expiration date. To get started on your road to credit restoriation, contact our attorney at Van Horn Law Group for a free case evaluation.
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