In order to process and authorise a loan/credit card application, the Credit Score and the credit report play a significant role. A lower score will adversely affect your application. If you have a small score, then you want to raise the score so that you don't have to challenge the lender with difficulty. How will your credit score be repaired? What might be wrong if the score had been lowered? Can credit repair company help you?
WHAT DOES CREDIT REPAIR MEAN?
Credit repair is the procedure by means of a credit repair service that corrects,rectifies and increase your credit score and help you in rebuilding your credit profile.
WHAT IS A CREDIT REPAIR AGENCY?
An agency or a company which helps consumers to manage and improve their bad credit history is a credit repair agency. Consumers do not have the requisite expertise and/or time to file disputes in their credit rating for correction. These customers may be helped in filing disputes by credit repair companies. Before you trust them, it is advisable to check the authenticity of a credit repair service. There are a range of agencies in marketing which are fooling customers by making false commitments ..
WHAT ISSUES CAN OCCUR WITH A CREDIT INFORMATION REPORT?
In your credit information report two kinds of problems could be causing errors:
- a) Incorrect information stored in your credit history and credit report.
- b) Defaulting on the payment can cause a wrong impression on your credit report for the following reasons:
- Financial hardship.
- Missed payments on credit cards due to relocating domestically/internationally.
- Disputes with the lender regarding charges or annual fees.
- Non-receipt of card statement leading to missed payments.
- Disputes with the lender on account of fraud.
UNDERSTANDING YOUR CREDIT REPORT
Any factors that can lead to a bad score have to be reviewed on your credit report.
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Check all the open accounts:
There are two cases in which an account can be stated ‘open’ without your knowledge.
- i.The lending institution may have missed communicating the closure of an account.
- i.The lending institution may have missed communicating the closure of an account.
- ii.The open account may not be yours.
In case there are any of the above errors found, dispute it with the credit rating agency.
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Check the status of accounts:
If some of your accounts have a "written-off" or "settlement or “suit filed” status, then the Banker or Lender will interpret it negatively. Check if every account is wrongly tagged and raise a dispute when appropriate.
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Check the payment history of every action:
Any other entry than '000' or 'XXX' in the payment history of the Days Past Due section suggests that certain payments have been skipped. In addition, make sure you pay bills on time. This will help you increase your score a lot; however, you will have to change your credit score for a minimum duration of 6-8 months.
ACTIONS TO BE TAKEN
Given the potential problems surrounding a credit report are discussed above, here are the steps that you should take.
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• Incorrect information:
You may enter into a dispute on the credit agency's website when you find the incorrect details. For CIBIL, the steps given in this page can be followed. If the lenders confirm once again that the information is right in the report, the report will not be updated. In this situation, the lender must be approached and explained directly.
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• Defaulting Payments:
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i.Financial hardship:
You should reimburse yourself for payments that have been missing because of real financial difficulty, work loss, or unexpected circumstances. In order for the lender not to take any legal action that should impede its credit record it is often advised to notify the lender of the financial situation.
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ii.Intern ational/domestic relocation:
When you intend to move it, it is as important to switch your loans and credit card accounts as to transfer your savings account. Make sure the lenders are aware about your relocation strategy. Otherwise, the payment of missed payments, service charges and late payment penalties can eventually take place. This also causes your credit score to sink. The savings account must always be held active, after relocation, connected to your credit card or loan.
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iii.Disputes with a lender about charges/annual fee:
A credit card or a loan you will seek may be subject to varying charges. Some citizens will have to pay once during daily periods such as interest rates, fines, transaction fees, maintenance costs, issuance fees, annual fees, repair fees, transfers, prepayment fees and many more. You need to be informed that they are applicable and when they apply. It would affect your score if you didn't pay attention when signing up for and then challenge the charges.
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iv.Non-receipt of the statement:
You can not pay the due amount because the credit card statement has not been issued. However, you are obliged to pay the remaining balance regardless of receipt of the statement in the terms and conditions. Your reason for missing payments is not considered legitimate. If the balance is not charged, you can incur a late payment charge and a service fee. Try to fix your problem faster so that your credit score is not impacted.
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v.Disputes with a lender on account of fraud:
If you find out that the report mentions a fraudulent transaction, raise this to the lender in question. The lender takes care to make a final decision. Have these conflicts settled as easily as possible, so that your credit report does not leave a trail.
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IMPORTANT POINTS
A credit repair agency cannot explicitly delete or edit the credit report information.
The online dispute resolution process is available free of cost on credit rating agency websites such as CIBILEquifax,Experian etc
All changes to your credit report must be accepted by the Bank/Financial institution.
The final credit report shall only be submitted to the customer at their email address or postal address even though you apply for a repair credit through a department. The report's content is confidential and not communic ated to anyone.