In today’s economy it is quite too often that a person will notice at some point that they have bad marks on their credit score. Before a person can remove bad marks on their credit score it is crucial for them to understand exactly how bad credit affects them.
One of the first things that you must realize about having a bad credit score is that it will always affect way more in your life than just your credit. Your credit score if it is in band standing can actually affect your chances to get certain jobs, how much your insurance payments will be, and in some cases even your personal relationships.
There are many different kinds of credit scores that can be used to determine your credit level but the one that is mostly looked at is called your FICO. The FICO credit score was named after the company who invited it, Fair Isaac Corp. Your FICO score will look at things such as you credit payment history, as well as your borrowing history.
The FICO score does not however, take into account your age, or net worth. The range of your FICO credit score will run from 300 to about 850, with any score that is more than 750 considered as being more than perfect credit and anything that is below 550 will be looked at as a very poor credit history.
Your credit rating will ultimately be coming from a credit report, which is a compilation that will be put together by an agency that reports you payment history, debts, as well as your employments and addresses. Unknown to most people is that there is something known as the Fair Credit Reporting Act that gives any future employer the ability to upon receiving your consent look at what your credit rating is and use it as a basis to hire you or not to hire you.
IF you have a very poor credit score in some cases it may lead to hiring officers questioning you more closely than they would someone with an almost perfect credit rating. Bad credit ratings will mostly have a negative effect on individuals who are looking to go into any kind of financial service.
It is also a good idea that if you plan on marrying someone that the two of you sit down and talk about each other’s credit scores. A lot of times a person’s credit score will tell you some interesting things about them. Oftentimes it will be a good indicator of how your potential partner will act in a marriage setting. Your credit score may also affect the way things will be divided between you and your potential spouse should you decide to divorce.
Bad credit may also play a major role in your life if you plan on opening your own business due to the fact that some lenders will not finance you or make it hard for you to get financed. You will also want to keep in mind that having bad credit can affect your chances of renting an apartment a well. Some landlords will look into a person’s credit history and use it as a deciding factor of whether they want to rent to you or not. After you have established a good understanding of how having bad credit can or will affect your life, the next thing that you will want to do is see how you can remove some of the bad marks out of your credit history.
You will need to be really prepared if you want to increase your credit score because it is not an easy task. You can start by trying to dispute any negative or incorrect marks that are on your credit report. Negative marks will often include things such as, any late payments and collection attempts on your credit report. These types of marks will stay on your report for about seven years.
The only way that you are able to find out if you do indeed have negative marks on your credit report is to try and obtain a copy of it. You will then want to make a list of all the marks located on them and then send in a dispute letter. If you do not know how to obtain a copy of your credit report, then you can most likely order one from any major credit bureau. The bureau that you request your information from will then give you a set of instructions that you will then need to follow as well as circle every item on the report you wish to dispute.
Each time that you highlight an item you will need to give a brief description of why you are disputing that particular item. Remember to always keep your explanations and excuses directly to the point, and never put in long generalizations of everything that was happening in your life during that time. Your credit bureau of choice will then have 30 days in order to investigate every negative mark that is listed on your report.
If the bureau agrees with any of your claims they will contact you as soon as their investigation is over. In the case that the negative marks do not get remove the bureau will then mark them down as being verified. After a negative entry has been verified the creditor, bank, or the collection agency that gave you the negative entry will have to be contacted to prove their entry.
Once you have contacted them about their entry, you will then have to ask for a copy of your original agreement, as a way for them to verify that the debt is yours, and their way of calculating your debt. It is good to keep in mind that the FCRA will require them to prove that any negative marks on your report are yours.
If they cannot prove that any of the negative marks placed on your report are actually yours, they are then required by law to remove them. If you find that after mailing your bank, creditor, or your collection agency that you have not received any response from them, then it is your duty to mail another letter that will include a receipt that will let them know they reported information that is not valid to the credit bureau.
In some cases you may have to include in your letter that you have plans on writing to the Federal Trade Commission, which is the agency that controls the FCRA, and let them know that you have intensions of suing them. You will more than likely be guaranteed to get a response from them after sending in a letter stating this.
If they in fact do give you a response with evidence, you should review that the evidence is valid. If it is found that the evidence they provided is not enough, you will need to mail them again stating to them that you want them to remove the negative marking from your report. Following this method will without a doubt help to increase your credit score a small percentage, but even a little increase in credit can change how your credit will affect your life.
Click here to learn more about how to report an erroneous credit report.