“Why Should I Fix My Credit” – Part 1 of 2 Part Series

So for some of my clients the biggest question after they have viewed their credit report is “Why should I spend the time to fix it”? Fixing your credit report or spending the time to improve your scores can be very time consuming and not to mention dealing with all the creditors can be very irritating. However, when everything is said and done it is well worth the time and effort.

In today’s society credit scores are used very often and for many things. Lenders use them to determine your risk associated with offering you credit. It can be used in everything from mortgage loans to auto loans. Some of the areas that are not as commonly noticed but definitely still apply are credit cards, student loans, credit unions, rental applications, employment applications even cell phones and car insurance. If you don’t believe me talk to someone from a cell phone company and let them know you have bad credit.

Sometimes lenders will still offer credit even with a bad report but in each case it will cost you more than you realize to acquire that credit. In the mortgage lending world and for that matter any lending environment, you are given the best terms when you have the best credit. So oppositely you are given the worst terms if you have bad credit. Not only can this affect your ability to get loans but it will also cost you a lot of unintentional money spent because of this.

So now you may be wondering how and why these negative items are reporting on your credit report. Well, even though there are many different forms of negative items, lates, balances, collections, inquiries, length of account history, etc. they all are reported from the same source…your creditor. Usually every 30 – 60 days your creditor or lender will report any new history, whether good or bad, to the reporting agencies. Even if the information is not true…unfortunately it is up to you to fix it. Just as there are many ways that good and bad credit can be reported there are just as many ways that false information can harm your credit report, identity theft is only one example.

It is wise to view your report on a biyearly basis and having a professional walk you through the reporting information can also be very beneficial. There’s a lot of information to look over and it can be very overwhelming to look at, especially if there are lates and erroneous information. I have seen it over and over and over again with clients.

So once you see the different items that are reporting to credit, false or not, there are two areas that you want to focus on fixing. Quite simply they are the items that are not true and the items that are true and are negatively affecting your score.

With the right direction, it can be fairly easy to get false information removed from the report. There are hundreds of articles that can help you with this. The ones that I want to focus on are going to be the items that are true. These can be much more time consuming and difficult. However, I have to add, they may be removed from the report but you still will owe the balance until it’s paid off.

I’m going to leave you hanging…I know, don’t kill the messenger. Next week, I am going to talk about what tools you can uses to get these “true” items taken off your report at a rapid pace. The best part is that in the process this will remove the false information as well. Stay tuned for more info.

Dedicated to your Financial Success,


Kenton Becker
kentonb@empireoptions.com
Managing Partner / Lakemont Mortgage Specialist
License # 510-LO-36929
http://www.empireoptions.com/