Inaccurate information on your credit report can present a wrong picture of your financial situation and create credit problems for you. For avoiding a poor credit score, it might be necessary to carry out credit repair. You can do this yourself or search online for “credit repair near me” and find a reputable credit repair company to resolve the issue for you. Whichever choice you make, you need to get informed about credit repair and know how to avoid some common mistakes that many people make.
Common credit repair mistakes to avoid
Here are some common credit repair mistakes to avoid:
Not knowing your rights
It is essential to know about the laws that protect your rights as a consumer. Some of these are the Fair and Accurate Credit Transaction Act (FACTA), the Fair Credit Reporting Act (FCRA), and the Credit Repair Organizations Act (CROA). As per these laws, you can get one credit report for free every year, you have the right to dispute and get errors corrected, and you have the right to know if your loan application got turned down due to your credit report.
The credit agencies must also inform you and get your permission before sharing your credit information with a third party. If you hire a credit repair company, they are legally required to give you correct information and a service contract. They must also adhere to the legal requirement that allows you to have a three-day return period if you are not happy with their services.
Not checking your credit report
If you do not check your credit report every year, you will not know that you need to make credit repairs. You can access your credit report on the Free Credit Reports page of the Federal Trade Commission. Since the FCRA backs these reports, you can be sure you are getting an accurate one.
Not undertaking credit repair on time
It can take seven to ten years for negative information to come off your credit report automatically. However, if you undertake credit repair on time and use credit responsibly, it can take anywhere from three months to six years for your credit score to show significant improvement. That is why you need to check your credit score frequently and immediately contest any errors you find.
Not getting educated on credit issues
The more you educate yourself on credit issues, the better equipped you are to manage your finances and reduce your debts. You will know how to read your credit report correctly and dispute the errors you find in it. You will also know that your credit score will benefit more from paying off high-interest debt first.
Not keeping accurate documentation
You will benefit from making a habit of keeping all finance-related documentation, especially the documents that show that you made your debt payments on time. It may be necessary to present such documentation to the credit agencies when disputing errors in your credit report. With the paperwork as proof, you might face difficulties in protecting your legal rights.
Not maintaining a credit card account
While it can be tempting to forgo credit cards altogether to stay out of debt, you may benefit more from maintaining a credit history. Since your credit history affects your credit score, it may help to have a reasonable balance and pay off the credit debt every month. Just make sure that you only use the credit card to make payments you can afford.
Not making timely debt payments
To make your debt more manageable, you might pay off the debt with the highest interest first. However, if you miss other debt payments, it could adversely affect your credit score. As difficult as it might be, you need to find a middle path for lowering your debt and making timely payments.
Not checking the credit repair company
Do your homework while you are looking online for “credit repair near me”. A legitimate credit repair company will not ask for upfront payment, will not promise instant results, and will not ask you to lie or give inaccurate information. On the contrary, the company will explain your legal rights and be upfront about what you can expect from it.
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