There is nothing more awkward than going to apply for a loan, insurance, job, etc. only to realize that you may not qualify because you’ve been a little neglectful in this one area of your life.
It’s that moment of fear that rises, waiting for the credit to be pulled and for the decision to be revealed. If you’ve ever experienced this, you know that you’ll have one of following two responses: a feeling of disappointment or a sigh of relief.
To avoid this fear and live in Credit Report Confidence, here are a few suggestions…
Take advantage of the free credit report you’re entitled to each year from each of the three major reporting agencies. Taking a proactive approach to reviewing your credit will help you determine where you stand credit wise. It really may not be as bad as you think. After a few simple corrections, you could be well on your way to a better credit history.
Note: The three major credit reporting agencies here in the U.S. are Equifax, TransUnion and Experian. They are available for free without a score at www.annualcreditreport.com.
Dispute any incomplete or inaccurate information. With all three bureaus you have the right of dispute. The process is a follows: you make the dispute, the credit reporting agency investigates and must report findings with 30 days. If the creditor does not respond to the credit agency’s request, the information is removed from your file.
Understand how your credit scores are determined. There is really no need to try and figure out the mathematical logistics of calculating the scores. The point is to focus on a few key areas.
- Paying bills on time.
- The amount of debt you owe in comparison to your credit limits. If the amount you owe, is close to your credit limit, your credit score will be affected negatively.
- The length of credit history you have.
- The application of too much new credit within a short length of time is a negative sign and impact is reflected in the report.
- The type of credit accounts you have. A good mixture of revolving and installment loans could help improve your score.
Settle outstanding negative debts one at a time. If you have accounts that are valid and have been either charged off or placed for collection, contact them one by one to settle the debt after you’ve saved enough money to offer for settlement. If an agreement is made, have it sent to you in writing prior to making the settled payment and be sure to keep copies for your records.
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Remember, the goal here is to increase your Credit Report Confidence. It won’t happen all at once, but taking actionable steps over time will make you part of the population who has no credit report fear.
**FREE HELP! Ask Your Question Below**
Through this Friday, November 2, 2012, I’ll answer any credit report question that comes from a comment on this essay. Whatever you don’t understand about credit, enter it as a comment below and you’ll get a reply directly from me…no questions will be left behind. So ask away!
Meanwhile, I’ll continue working on some key components of The Tower Project, an upcoming 16-week interactive course which was announced to the community not long ago. The purpose of this project is to help people build their own financial tower. It’ll be intensive….but also worth it. Stay tuned for more info within the next few weeks.
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UPDATE: Friday, November 2, 2012 – Comments now closed. Thank You!
{ 2 comments }
what happens when you have a repossession from 10 years ago, it is still on your report through someone beside the lending source. Should I still pay off the remaining balance?
Hi Gwen, each state has their own statute of limitations for debt collection which can vary from 3-15 years (the average is about 7). Once the statute of limitations has passed, you have the right to contact each credit reporting agency (Equifax, Experian, TransUnion) to request that the out dated information be removed. If, by any chance, you contact or are contacted by the creditor/collection agency and acknowledge the debt, the statute of limitations starts all over again. So probably a good place to start would be with the three credit reporting agencies. Good Luck!
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