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Improving and Fixing Bad Credit Score

Improving and Fixing Bad Credit Score

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Published by Jason Acidre
A detailed research how to improve credit scores.
A detailed research how to improve credit scores.

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Published by: Jason Acidre on Mar 02, 2011
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03/02/2011

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IMPROVING AND FIXING BAD CREDIT SCORE

Entry originally published at: Consumer Credit Capital

Improve Credit Score
Improve credit score and save interest costs with a better credit score. Improve your credit score and save thousands of dollars when borrowing. Improve your credit score and save hundreds when buying car insurance. Improve your credit score and open up job opportunities. Let's look at the difference between a bad credit score and a better credit score below. Tom went to buy a car and got turned down at the car dealership for a bad credit report with a low credit score. The car dealership was not able to finance him because of bad credit with a bad credit score below 600. He went down the street and bought at a "we finance here" car lot. Based on the usurious interest charged he bought a car payment he couldn't afford. Several months later and several thousand dollars poorer Tom's car was towed away, repossessed, and his credit report was trashed. Even had he been able to pay the car payments, at the interest rate agreed, the payment schedule cost more than $3,000 than had he fixed bad credit from the beginning. The point is to improve credit score and save thousands prior to a major purchase decision. Tommy went to buy a car and got approved for financing but due to an error on his credit report, unknown to him at the time, he ended up paying a higher interest rate which cost him several thousand dollars over the life of the loan. Unfortunately, Tommy never knew, never was told, about this error and its impact on his credit report and his credit score. In this case, it was a small collection account. Apparently, a debt collection company had added a collection account to his credit report without his knowledge. He never got a letter in the mail, never got a phone call, never got notice whatsoever of an attempt to collect a debt. His first knowledge of the error was in the car dealership at the finance officers desk. While Tommy was appreciative of the finance manager pointing out the collection account on his credit report what the finance manager left unsaid was the lowest interest rate was no longer available to Tommy. Instead the finance manager was forced to charge a much higher interest rate and Tommy ended up spending thousands of dollars more over the life of the loan. The point is improve credit score prior to a major purchase and save money. Thomas went to buy a car, but prior to the major purchase he called Consumer Credit Capital and they reviewed his credit report with him and his credit score: For Free! What he discovered through the free evaluation is a bad credit score can be improved.

After checking his credit report, that day on-line, he found a collection account that was not his. Within 24 hours Consumer Credit Capital prepared a credit dispute letter, to improve credit score. Thomas mailed the credit dispute notifying the credit bureau of the error on the credit report. In this case the credit bureau investigated the credit dispute and sent a "credit bureau results of investigation" back to Thomas informing him they would not remove the collection account, they would not improve credit score. Thomas forwarded the results of the credit investigation to his credit repair specialist and the credit repair specialists followed through with the credit repair plan and together 60 days later the credit bureau resent Thomas a letter this time informing him they had deleted the collection account from his credit report. His credit score improvement was 60 points in less than 90 days. He was able to obtain a zero interest cost loan with no money down. Focus on improving a credit score and better credit scores saves thousands of dollars. Increasingly you need a better credit score in the 700's to get the same financing available in the mid 600's just 2 years ago.

Improve Credit
To improve credit starts with a review of your credit report and credit score. Evidence suggests credit reports are prone to errors. You have the right to improve credit by removing questionable, inaccurate, incomplete, untimely negative credit remarks. Your credit score is only as good as data reported on the credit report. As the credit economy has exploded over the past 10 years your credit report is increasingly prone to errors and fraud. Identity theft is the number one consumer reported complaint in the United States and complaints against the credit bureaus and furnishers to the credit bureaus are not far behind. Improve credit by reviewing your credit report. Credit report complaints, credit disputes, to the credit bureaus include disputing questionable, inaccurate, unverifiable, untimely, and biased information on the credit report. Improve credit by reviewing your credit report maintained at the three major credit bureaus: Experian, TransUnion and Equifax. According to the Federation of State Public Interest Research Groups, 79% of all credit reports contain errors. The problem of inaccurate credit reports seems to be growing according to Dan Buell, Vice President of Experian as noted in an interview December of 2009, "As charged-off debt and whole loans are being bought and sold numerous times, the process of establishing the chain of title generally has been complicated, making it difficult to validate and resolve collection accounts." Improve credit by removing collection acounts where title is unsubstantiated.

Another study conducted by US Public Interest Research Group (US PIRG) showed that 29% of credit reports contained serious inaccuracies (false judgments, false delinquency notices) that could result in denial of credit. Overall, PIRG found that 70% of reports had some type of error. Further, 20% of reports were missing creditworthiness information that would have assisted a consumer in obtaining credit. This results in lost jobs, denied mortgage applications, and higher interest rates for those who do obtain credit. It is important to review your credit report to improve credit prior to making a major purchase. To improve credit, look for questionable, incomplete, inaccurate, or outdated credit lines and prioritize based on impact. After prioritizing to improve credit, prepare a credit report dispute to the credit bureau asking for an (re)investigation, including complete information detailing the specifics of the credit entry in dispute. Use clear language for your credit dispute. For example, you may have a canceled check for a payment made 6 months ago that the furnisher of information to the credit bureau is reporting as a 30 day late payment. In this case, you would dispute the 30 day late payment writing the credit bureau you did not have a 30 day late payment and you can provide a copy of the canceled check as proof of on time payment. Be clear as to what you require of the credit bureau. For example, in the above case you would require that the credit bureau correct the 30 day late payment mark. Be clear, simple and straight forward in your written communication and keep a record of your credit dispute. Beyond credit dispute, to improve credit, with the credit bureau many successful credit disputes that result in deletion require a next step disputing the questionable, inaccurate, unverifiable, biased information with the furnisher of information. There is a chance the credit dispute can be mishandled or not dealt with. Therefore, it is important to keep credit records of both the credit dispute with the credit bureau and the credit dispute with the furnisher of information and continue to keep dispute records until you achieve the results required. Don't count on the credit bureau or furnisher of information to keep the credit dispute record for you. When you file a credit dispute with the credit bureau make sure you hold the credit bureau to a reasonable timeline outlined by the Fair Credit Reporting Act (FCRA). Require the credit bureau to be responsive including providing you with appropriate supporting documentation for any credit dispute made. There is a good chance when you first contact the credit bureau you will receive a verification of the record in question from the credit bureau. Your work is not done. Make sure the credit record is correct including the account number, the charge off date, the last activity date, the balance and the high credit limit. Obviously, the credit bureau is required to have all of the credit details correct. Remember to keep detailed records and document everything as you follow through with your plan. Be mindful of disputing only records that are hurting your credit score. Just because there is an erroneous late payment recorded on a car loan mistakenly removing the car loan from your credit report entirely could do more harm to your score than good. As you continue to correct your credit report make

sure you get a new credit report and new credit score every 30 days and reassess the totality of your credit situation again including how many loans, credit lines and credit cards are outstanding. How much is owed on each? How much credit is available? Make sure you adjust your strategy and goals based on your current situation. The accuracy of your credit report including your payment history, credit utilization, and mix of credit are all important areas to focus on when you wish to maintain and improve credit. Improve credit and save thousands of dollars over the life of a loan on a major purchase. Making payments on time and paying at least the minimum due on each account is required.

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