Your Credit History And You

Credit History

Not looking after your credit score if one of the dumbest things you can do. It will damage your future ability to finance anything and make your life quite miserable if you are not careful. Fundamental loan products such as car loans or home loans will be denied and your quality of life will be reduced substantially.

Some people do not think that this is a problem but probably due to them not having to apply for a loan yet. They have not felt the pinch of not being able to purchase an item just because of their past financial mistakes which creates their current bad credit score. The feeling of dreaming for a car or a home but only to have the dream dashed right before your obtain very eyes because you can't get a loan to finance the purchase. Needless to say, it can be extremely painful and disappointing to say the least.

Although most of us would have made a few errors when it comes to maintaining our credit history there are still improvements that can be made. It is important to realize that it's your credit score which determines your creditworthiness and it is thus vitally important to get your figure up before actually applying for a loan. Any lender will obtain your FICO score from the 3 reporting agencies for consideration.

We recommend that any borrower should obtain a copy of their credit report at least a few months before applying for a loan. The idea is so that you can look through your credit score and see if there are any areas where you can improve on significantly or even close some accounts which are still being wrongly indicated as still owing (e.g. a overdue charge for a parking ticket etc) which can negatively impact your credit score.

It should be noted that 70% of credit reports have errors in them and it is actually up to the owner of the credit report to make the corrections, not up to the reporting agencies. The worst thing is to have a loan denied due to a mistake in your credit report which you did not correct beforehand. Remember that the due diligence on the credit report is up to you and could mean the difference between and approval or a denied loan.

It is also important to realize that even if you have found errors in your credit report that you can’t have the mistake removed simply by stating it and calling the credit reporting agency up. What has to be done is that the report has to be filed and a re-verification of the affected transactions has to be made to confirm if it is true that the mistake has been made. This process can take as long as 2 months and generally takes 30 days before the mistake is taken out of the credit report and the information disseminated to all the rest of the credit reporting agencies. If you are looking to take out a loan soon then this might not be an option that you can realistically consider.

The fact is that dealing with these credit reporting agencies can be very frustrating as they are huge bureaucratic organizations which don’t really have a very good customer relations department. It can be both confusing and tedious for a person who hasn’t had to deal with multiple people pushing off their responsibilities to each other. This is the exact reason why there are so many credit repair companies that are set up just for the sole purpose of being an intermediary between you and the credit reporting agencies. The credit repair companies will go through your credit report with a fine toothed comb to find any mistakes and also look at ways which can increase your credit score and push for the amendments to be made.

A word of caution though, there are many credit repair companies simply set up just to charge you a fee and to simple forward any mistakes or amendments to the credit reporting agencies and not do any follow-up service. It is vital that you check the credibility of the credit repair agency before you sign up for their service. We recommend that you take a look at the list provided by the Bureau of Better Business (BBB) which lists legitimate credit repair agencies in their website.

Little Kiara
Husband, (formerly) Coffee Lover, Progressive Rock, A loving husband [?]. Married to a (currently) honorary angel in a regency in South Sumatra. Spoiled in his wife's arms and likes to follow his wife from the kitchen to other activities.

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