Credit Score – Demystifying 3 Myths

Overview:

You are certainly not alone in your endeavour of trying to raise your FICO score. There are numerous people with a poor credit score and they are trying hard to work towards a better one. Bad credit labels you as “unreliable” and “risky” which certainly is a humiliating factor. Unfortunately, creditors do not care whether you had a medical emergency, or a mishap, divorce, etc. what they are bothered about is the three digit number on your credit report.

If the score is low, then it automatically labels you are “unworthy of credit.” In the process of refining their credit people make mistakes which rather than improving have an adverse on their credit score.

The Basal Sin:

People turn financial geeks and try to fix their scores themselves. This is the basal or cardinal sin that a number of people commit while fixing their credit score. Your credit report and knowledge about the same go hand in hand.

All of us are aware of the fact – “Half Knowledge is Dangerous.”  The same applies in this case, as well. In order to fix a bad score people need to know the following:

  • What’s the structure of your FICO score?
  • What are the legal rights that people have in Fair Credit Reporting Act?
  • How can negative items be disputed in your report?
  • How to request validation of the report?
  • How to negotiate for best settlement amount while discussing with collection agencies?

The nutshell of all this information is you need to arm yourself with all the relevant information to win this battle otherwise it’s certainly a lost cause.

Don’t blindly follow the book:

People have a habit of following the most popular recipes. However, keep this in mind that what whole good for me may not be appropriate for you. The credit repair cookbooks give suggestions such as – “Payoff Debt in Full,” “Close all Bad Accounts.” It is always recommended to get in touch with an expert rather than fixing the problem yourself.

Don’t make the mistake of putting the cart before the horse:

Plan in advance and ensure you do things in order. Some people hire the services of a credit repair company without even applying for their credit report. Some people apply for disputes without understanding them thoroughly.It is to be noted that the world of credit report works in a chronological order and hence it is wise to go by the same to work towards a better score.

Updated: November 25, 2016 — 5:31 pm

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