In order to process a loan or a credit card application, Credit Score and the Credit Report play a significant role. A lower Credit Score will adversely affect your chances of approval of your application. If you have a low credit score, then you want to raise the credit score so that you don’t have to face the rejection of your loan or credit card application. How can your credit score be repaired? What might be wrong if the score had been lowered? Does a Credit Repair company help you?
WHAT DOES CREDIT REPAIR MEAN?
Credit repair is the procedure by means of a credit repair service that helps you in correcting or rectifying your credit score and credit history.
WHAT IS A CREDIT REPAIR AGENCY?
An organization that helps consumers to manage and improve their wrong credit history is a credit repair agency. Consumers do not have the requisite expertise and time to improve and repair their bad Credit History These customers can be guided and helped to improve their credit history again by adopting a systematic and disciplined approach.
Before you trust them, it is advisable to check the authenticity and credentials of a credit repair company. There are many bogus and fraud companies in the market who cheat by making wrong commitments.
WHAT ISSUES CAN OCCUR WITH A CREDIT INFORMATION REPORT?
In your credit information report two kinds of problems could be causing errors:
- Incorrect information is captured in your credit report and credit history.
- Default on the repayment of loans and credit cards have an adverse impact on your credit health. The following could be the reasons for defaulting on repayment on your credit lines
- Financial hardship.
- Missed payments on credit cards due to relocating domestically/ or internationally.
- Disputes with the lender regarding charges or annual fees.
- Non-receipt of card statement leading to missed payments.
- Disputes with the lender on account of fraud or identity theft.
UNDERSTANDING YOUR CREDIT REPORT
Any factors that can lead to a bad score have to be reviewed on your credit report.
Check all the open accounts: There are two cases in which an account can be stated ‘open’ without your knowledge.
- The lending institution may have missed communicating the closure of an account.
- The open account may not be yours.
In case there are any of the above errors found, dispute it with the credit rating agency.
Check the status of accounts: If some of your accounts have a “written-off” or “settled ” status, the lender will interpret it negatively. Check every loan account is reported correctly. Raise a dispute if you find any loan account is reported wrongly.
Check the payment history of every action: Any other entry than ‘000’ or ‘XXX’ in the payment history of the Days Past Due section suggests that certain payments have been skipped and not paid on time. In addition, make sure you pay bills on time. This will help you increase your score a lot
ü ACTIONS TO BE TAKEN
Given the potential problems surrounding a credit report are discussed above, here are the steps that you should take.
- Incorrect information: You may enter into a dispute on the credit agency’s website when you find the incorrect details. For CIBIL Transunion or any other Credit Bureau company, the steps given on this page can be followed. If the lenders confirm once again that the information is right in the report, the report will not be updated. In this situation, the lender must be approached and explained directly.
- Defaulting Payments:
- Financial hardship: You should repay outstanding or overdue that have been missing because of real financial difficulty, work or job loss, or unexpected circumstances. In order for the lender not to take any legal action that should impede its credit record it is often advised to notify the lender of the financial situation.
- International/ or domestic relocation: When you intend to move it, it is as important to switch your loans and credit card accounts as to transfer your savings account. Make sure the lenders are aware of your relocation strategy. Otherwise, the payment of missed payments, service charges, and late payment penalties can eventually take place. This also causes your credit score to sink. The savings account must always be held active, after relocation, connected to your credit card or loan.
- Disputes with a lender about charges or annual fee: A credit card or a loan you will seek may be subject to varying charges. You have to pay some charges, fee and interest, issuance fees, annual fees, maintenance charges, part payment fees, and many more once or periodically. Raise a dispute with the lender for any discrepancy or wrong charges.
- You need to be informed that they are applicable and when they apply. It would affect your score if you didn’t pay attention when signing up and then challenge the charges.
- Non-receipt of the statement: You can not pay the due amount because the credit card statement has not been issued. However, you are obliged to pay the remaining balance regardless of receipt of the statement in the terms and conditions. Your reason for missing payments is not considered legitimate.
If the balance is not charged, you can incur a late payment charge and a service fee. Try to fix your problem faster so that your credit score is not impacted.
- Disputes with a lender on account of fraud: If you find out that the report mentions a fraudulent transaction, raise this to the lender in question. The lender takes care to make a final decision. Have these conflicts sorted out as easily as possible, so that your credit report does not leave a trail.
- A credit repair agency cannot explicitly delete or edit the credit report information.
- The online dispute resolution process is available free of cost on credit rating agency websites such as CIBIL Transunion, Equifax, Experian etc.
- All changes to your credit report must be accepted by the Banks and Financial institutions.
- The final credit report shall only be submitted to the customer to their email address or postal address even though you apply for a credit repair through a company. The report’s content is confidential and not communicated to anyone.