Are errors on your credit report damaging your credit score?
If so, you have two choices: Fix them yourself, or consult a credit repair agency.
“If the information isn’t 100 percent correct, the credit agencies have to remove it or correct it,” says Susan Joslin, a credit repair consultant with Prime National Credit Repair.
Credit repair isn’t magical. No one can remove negative credit information that is accurate and current. (Beware of any company that says it can.) But it can remove inaccurate information, Joslin says. For example, let’s say you paid off a collection company several years ago, but the debt still shows up on your credit report. Or suppose you sold your house in a short sale, but the transaction shows up as a foreclosure on your credit report. A foreclosure could keep you from buying another home for as much as seven years. The waiting period after a short sale is only two years, Joslin says.
- Find out how long the company has been in business.
- Make sure it’s registered with the state and bonded.
- Check its rating with the Better Business Bureau.
- Be aware that you have a state-mandated “Right-of-Rescission” to change your mind about hiring the company. The company won’t cash your check until that period is over.
If you’re shopping around for a mortgage or a car, don’t let every company you speak with check your credit. Even if you’ve initiated it, a series of credit checks can harm you, Joslin says. Wait until you’ve found the deal you want before you OK the credit check.
Joslin’s top tips to keep your credit secure:
- Establish a credit history when you’re young, even if you prefer to use cash. Eventually, you’ll want to buy a car or a home on credit. Without a credit history, it will be more difficult–and you’ll likely be charged a higher interest rate on the loan.
- Make your credit card payments on time
- Don’t close older accounts if you don’t use them; you’ll destroy part of your credit history and possibly lower your credit score.
- If you’ve maxed out your credit cards, start paying those down. Don’t owe more than 30 percent of your credit limit on any card.
EDITOR’S NOTE: In addition to Joslin’s firm, there are a few reliable, highly qualified agencies that help companies and individuals deal with debt and raise their FICO scores. Another one worth noting is TKG – The Kelly Group, based in New York. Visit kgroupconsulting.com or call President Jeanne Kelly – a regular guest expert on The Today Show and others – at 866-234-5977 for more information about her credit healing services! Please let us know of any other agencies that you can recommend by commenting below.