Credit Fixes

Martin Lukac asked:


An increasing number of consumers are beginning to understand how much a credit score affects borrowing ability. And with this rising number comes an increase in people looking to repair their credit score.

Fixing your credit history may seem like a big task. We all have heard the stories of how hard it is to remove errors from your credit report. This leads many consumers to turn to credit repair agencies to quickly clean up their credit.

However, this isn’t always the best thing for your credit. Many of these agencies are scamming consumers.

Common scams include the promise that negative information will be deleted from your credit report. This doesn’t happen unless the information can be proven false. No one is ever allowed to alter or delete information other than the credit bureau. You have to go through them to have info removed. An agency cannot do it for you.

Many credit repair agencies will try to tell you that by getting a nine-digit Employer Identification Number (EIN) you can establish a new credit file. It is a felony to lie on a loan or credit application. It is illegal to use your EIN in the place of your social secuirty number on a loan application.

Some credit repair agencies simply dispute every item on your credit report, regardless of the truth. Some items are removed if not verified by the creditor within 30 days. But they will be re-added later when they are proven. It doesn’t help you, just costs you money.

And the most common scheme occurs when a credit repair agency asks for a flat fee upfront. Once you pay, they disappear. Never pay for services up front.

If an agency requires payment up front, gives you no explaination of your legal rights, recommend that you not contact a credit bureau directly or suggest you invent a new identity, you need to look somewhere else first.

The fact is that you cannot remove accurate information from your report. You can easily have false information removed yourself. I recently had my mother’s credit card account somehow show up on my credit report. It only took two short phone calls (one was a follow-up) to the creditor to remove the information. You don’t need to pay anyone to help you.

When it comes to your credit score, the two top ways to improve it are in your hands, not someone else’s — pay on time and give it time.

jenahfah asked:


I’ve had this account for about two years, and I haven’t used it in a long time, and I’m thinking of closing it but I don’t know how it would affect my credit report. This is a secure credit card, with only a $300 limit. I have two other credit cards that I use a lot more often and I’ve been very responsible about paying bills on time.

Ryan Cote asked:


Good credit is key to economic success. You may not give to much thought to your credit report, but good credit lets you do a lot of things that most people take for granted: get a credit card, rental a car, obtain a loan, or even get an apartment. Missed payments to a creditor, or defaulting on a loan altogether, creates black marks that are recorded on your credit report when your creditor reports them to a credit bureau. Too many missed payments or defaulted loans will leave you with no option but to start the credit repair process, otherwise, your applications for credit cards or other loans will be turned down consistently until you do.

A quick search in the classified ads or on the internet for credit repair will give you tons of offers from credit repair companies offering a quick fix to your credit problems. Most of these companies have aggressive marketing strategies that promise to fix your credit report fast for a nominal fee. Be very cautious with these companies and deal with them at your own risk -many are not only scams, but also in most cases you can fix your own credit more effectively by doing it yourself.

Remember: there is nothing a credit repair company can do for you that you can’t do for yourself. Even though credit repair companies might imply otherwise, they can’t erase poor marks on your credit rating and they have no influence over the credit bureau. Most likely, the credit repair company will probably tell you to obtain a copy your current credit report and to challenge any negative items on it. You can do this yourself without actually paying someone to tell you to do it.

Sometimes, credit repair companies may even recommend that you perform activities that aren’t even legal to “fix” your credit. They might encourage you to begin working on a “new” credit rating by changing your banking information and address. Not only is this procedure illegal, it is usually ineffective. You are better off going through the credit repair process on your own. An online search will yield detailed sites with step-by-step instructions. Again, beware the source. Your best bet is going through a government-affiliate site or one that is put together by a trusted organization.

The best approach to credit repair is to first obtain a copy your credit report from the credit bureau. Examine the report closely, line by line, and make sure to challenge any errors on the report, in writing, to the agency that reported it. Challenge only items that are genuine. If your report is free of errors, you will need to repair your credit in the traditional fashion, usually involving obtaining a secured credit card that you use regularly, making regular payments on the balance. This will slowly improve your credit rating.

Most importantly, be patient and make smart budgeting decisions. Credit repair is not a quick process, and you will find that you are able to pay off your creditors given enough time. By making payments regularly and not defaulting on any loans, your credit score will eventually prove that you are eligible for credit. Although this method of credit repair is not a fast process, it is truly effective. By doing your own credit repair, you will be far more successful than if you were to employ a credit repair company.