We have discussed what credit is and other key terms used in credit in the last posts. Now for what everyone wants to know-what can be seen on your file, how it can help/hurt your score, and what can be done to improve all these factors. The good, the bad, and the ugly are all in plain view so if you think missing just one car payment is no big deal, well, don’t try it to see the outcome. Take it from me- it will cost you more than just that bill amount!
The credit bureaus who collect payment information (Equifax, Experian, and TransUnion, or what I will call the Big 3) each receive and record your payment behavior month by month according to the lenders who extend you credit. Paying on time and as agreed will be relayed as well as late, missed, deferred, or delinquent payments. As unfair as it is, there are no guarantees either that “paying as agreed”, on time, or early will always be posted correctly on your credit file. It is up to you to monitor your report and have discrepancies brought to the attention of your lender(s), the credit bureau(s), or both. This will take time, effort, and patience, no doubt, so if you are looking to apply for credit and have not viewed your file beforehand, it could be a costly mistake as well as disappointing. Don’t despair! This can easily be avoided. How?
Positive Action #1. Search Google for “credit monitoring” and websites such as CreditKarma.com and Quizzle.com will probably be on the first or second page of the results. Most have a free trial offer like CreditCheckTotal.com and are affordable per month compared to the alternative of higher interest or being turned down for credit. So, with credit file in hand…
Positive Action #2. Review the information on your file-then review it again. Scan over the contents of your file and be certain the information is correct. Clerical errors do happen so be sure items such as your name spelling, address, age, etc., are yours. Today’s credit files are (mostly) reader friendly with symbol keys and explanations on how to understand what is being reported about you. Go over a second time and verify accounts with a fine tooth comb.
Positive Action #3. Compare your records to your credit file. See a list of the creditors/lenders under your personal information section? It is typically shown in chronological order, and will have a month by month history of how they received your payments. Depending on how many you have and how old the account(s) are, this list can be lengthy. Now, it may take time, but it is very highly recommended this information is correct! Like I stated earlier, mistakes are made and typically not in your favor, so cross-reference and note any discrepancies. Be sure you have proof to offer for verification (bank account statements are VERY helpful) so you can…
Positive Action #4. Contact your lender(s) immediately to correct your file history. This can be done in a multitude of ways so find out or ask each one what the protocol is. The easier it is on them, the quicker and more willing they are to adjust as long as documentation is available. Allow several months for this to happen, but don’t be surprised if the Big 3 do not correct it as you like or expect. It may take even longer and although your lender has agreed with you and stated it will be adjusted, the Big 3 may ask for this proof as well as other info. It is necessary to contact each of the Big 3 separately and each has its’ own procedure for disputes. Check with Experian.com, Equifax.com, and TransUnion.com for the methods in place you will need to follow.
Believe me, I know this work can be tedious and downright aggravating. It is important to stay focused on the fact that this is an investment in you and will pay dividends! With time and a little determination, change can happen and bring you that much closer to a high credit score, lower interest rates, and consequently lower payments. So, congratulations! You have completed the first steps in achieving your credit goals and dreams, and be sure to reward yourself-by not applying for more credit just yet!
Credit Made Simple 