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Spot and Fix Credit Report Mistakes

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It’s one of the most crucial indicators of your financial health — and for one in five people, it’s got an error on it.

So if you haven’t checked your credit report lately, experts say now is the time to do it.

As the coronavirus pandemic batters the economy, lenders are raising their standards to protect themselves. So having a bad credit report right now could lock you out of a debt management opportunity, like refinancing your mortgage or getting a personal loan. It could also ding your future prospects when you’re ready to buy a home or open a high-tier credit card.  

“It shouldn’t take a pandemic for people to get into good money habits, which includes regularly checking your credit. It’s always important to know what’s on your credit report. Right now, there might be an emphasis or some urgency to really check it out,” says Douglas Boneparth, president and founder of the New York–based financial planning firm Bone Fide Wealth. “That’s predicated on this notion that people are looking for ways to access liquidity and cash, should the worst happen like having a loss in income.”

Recognizing this, the three major credit bureaus — Equifax, Experian and TransUnion — are now offering free weekly credit reports online, making it easier than ever to check and make sure your credit report is accurate. 

It’s worth taking 15 minutes to do it: One in five people are likely to find at least one mistake on their credit report, according to a study published by the Federal Trade Commission. And recent data from the Consumer Financial Protection Bureau shows that credit reporting is the agency’s most common complaint, with the majority (61%) saying the complaint was due to incorrect information on their credit reports. Companies closed 72% of complaints with an explanation, 18% with non-cash relief, and 0.3% with cash relief within 2018. 

Here’s what you need to know about checking your report — and if you find something’s off, use our email template below to fire off a complaint. 

What Are Credit Reports and How Do They Work?

Your credit report tells your financial story to lenders, and it allows them to make informed decisions about your creditworthiness. 

“Your credit report is like a report card that grades how well you manage your financial obligations,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling. 

There are three credit bureaus that publish these reports: Experian, TransUnion, and Equifax. These bureaus report information from your lenders such as payment history, balanced owed, and whether you’re paying on time. If you pay your bills on time and keep your balances low, you’ll have a higher score. Conversely, if you miss payments regularly, you’ll have a lower credit score. 

Potential lenders use one or multiple reports to verify your information. They’ll also use this information to determine if you’re eligible for financing and if you are what your terms should be. Therefore, monitoring your credit reports is an essential way to stay on top of the information presented to prospective lenders. 

How Often Should I Check My Credit Reports?

Normally, experts advise checking your report at least once or twice a year as a good practice. That’s how often the three credit bureaus typically offer free reports. Checking your own credit is considered a soft inquiry, which means it will not hurt your credit score.

But the pandemic has created a new normal, and all three major credit bureaus are allowing people to check their credit reports on a weekly basis until April 2021. Deciding when to check your credit can be puzzling, but it ultimately comes down to how confident you are about your credit history. For some, checking it once a year is enough, while others may prefer to check it weekly because of the pandemic. 

“At times like these, you should anticipate things perhaps falling through the cracks,” Boneparth says.

Boneparth says checking your credit report every week may be a little excessive, but that it could also be a useful tool for anyone who has suspended or deferred payments to make sure lenders are marking their credit history correctly. 

“Banks are allowing customers to either defer or reduce payments, and the concern may be that those payments would be marked as delinquent instead of current,” Boneparth says. “For individuals who are taking their financial institutions up on whatever offers to do that, it could make sense to more regularly check your credit report to make sure everything is the way it should be.”

During normal circumstances, Boneparth recommends consumers check all of their credit reports at least once or twice a year. There’s also the option to pull one report every four months by rotating the agencies.

By doing this, you can stay on top of your information and it allows you to promptly address any inconsistencies found on your credit reports. 

All Credit Reports Don’t Present the Same Information 

When glancing at each report, it’s important to double-check the accuracy of your personal information.

“If they have your income lower than what it’s supposed to be, then it could impact your credit, especially if you carry higher balances on your credit cards,” says Michael Zahaby, adjunct of finance for Florida Gulf Coast University. Along with verifying personal information, you’ll want to make sure each of your lenders properly reports your payment history and balance information. 

Moreover, when checking your credit, there’s a section for inquiries. This is where if you applied for a loan the inquiry shows up on one or more of your reports. 

It’s important to note the information presented on all three of your credit reports might not be consistent with each other. Some lenders might only report to TransUnion while others report to Equifax. So, don’t be surprised if one account doesn’t show up on all three reports. 

Another way things could be confusing is when you apply for a retail credit card. The inquiry comes up as the bank issuing the card, not the retailer (i.e., Synchrony Bank for Amazon) so don’t be alarmed when this happens. However, if you noticed any errors in one of your credit reports, it’s important to address them right away.

How Do I Dispute Incorrect Information on My Credit Reports?

You may be wondering where to start when it comes to disputing any mistakes on your credit report. First and foremost, you should immediately contact the credit bureau(s) about your concerns through a traditional letter or email. Without proper notice, credit bureaus won’t know to correct any errors on your credit report. 

“It’s not illegal for the credit bureaus to report inaccurate information, but it’s illegal for them not to correct it when given proper notice,” says Rob Harrer, an attorney for the Chicago Consumer Law Center.

It’s important to tell your credit bureau in writing what information you believe is inaccurate. The Federal Trade Commission provides a comprehensive example of what to include in a dispute letter to a credit bureau.

When making a dispute, you’ll also want to include any documentation supporting your claim. For example, if a creditor reports you didn’t make a payment but you did, then you can show proof by furnishing a bank statement.

“At the end of the dispute letter, state exactly what you want done in a concise sentence,” Harrer says. “For example, ‘Please perform a reasonable investigation and delete the account from my report.’ I like putting in the “reasonable investigation” because that’s the language in the FCRA (Fair Credit Reporting Act) so if it ever goes to court there’s less room to monkey around.”

If you’re stuck on what to say in a dispute letter to a credit bureau, this email template will help you spot and fix mistakes in your credit report.

[Your Name]
[Your Address]
[Your City, State, Zip Code]

[Date]

Complaint Department
[Company Name]
[Street Address]
[City, State, Zip Code]

To Whom It May Concern:

I hope this [email or letter] finds you well. I am reaching out to dispute the following information on my credit report from [give the name of the credit reporting company whose report has incorrect information]. Given that, the items I am disputing are circled on an attached copy of my credit report.

[Numerically list the items you intend to dispute]
Item 1: This item [identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.] is [inaccurate or incomplete] because [describe why]. I am requesting that the item be removed [or request specific change] to correct the inaccurate information.

[Repeat the paragraph above if they are more items to dispute]

I have enclosed copies of [any enclosed documentation, such as financial records or court documents] supporting my claim. Please perform a reasonable investigation and [delete or correct] the disputed item(s) from my report as soon as possible.

Sincerely, 
[Your Name]

Enclosures: [List what you are enclosing]

Zahaby recommends confirming everything in writing, including phone conversations with a lender and to jot down names of any representatives you speak to about the dispute. With these things in mind, here’s a closer look at how each bureau handles disputes:

Experian

Experian allows you to file a dispute online or via mail. When filing a dispute, you’ll want to provide the following information:

  • Personal information such as name, address, and Social Security number
  • A copy of a government-issued ID
  • A copy of a utility bill (to verify current address)
  • The lender, account number, and reason for dispute

Equifax

Equifax also allows you to file disputes online or through the mail. Similar to Experian, you’ll want to provide your personal information, a copy of a government-issued I.D., and the lender, account number, and reason for the dispute in writing. 

TransUnion

TransUnion also allows you to file a dispute online or through the mail. Similar to the other two, you’ll want to present your case in writing with all the supporting documents, as well as a copy of your government I.D. to expedite processing. 

Pro Tip

Take 15 minutes to run your credit report (for free!) at the three major credit bureaus, and use the template above to report any mistakes.

What Happens After I File a Dispute?

Once you file all the paperwork, the credit bureau(s) reach out to the lender with the dispute to have them verify the information they reported. If they find they made a mistake in reporting, they usually have to correct it within 30 days. However, the CFPB says the usual waiting period may be extended to 45 days as a result of the pandemic, as long as “the consumer provides additional information that is relevant to the investigation during the 30-day period.” Once they do, the credit bureau sends you a corrected report. 

Why Is It Important to Check My Credit Reports?

Your credit report is an important measure of your financial health — the main thing standing between you and getting approved for a credit card or loan. That’s why it’s important to be proactive and check up on your credit reports often. The pandemic has led credit bureaus to temporarily loosen their normal standards and make credit reports more accessible, with the option to access it as often as once a week for the next year.

By doing this, you can stay on top of important financial information that affects many parts of your life. And if you’re worried you’ll impact your credit by checking it often, don’t be. Checking your own credit score is considered a soft inquiry, which means it won’t raise any red flags on your credit history. 

Catching errors early on your credit report will save you a lot of headaches when it comes time to make large purchases, such as buying a home or a car. 

“It’s always better to come at anything in your financial life from a proactive position rather than a reactive position,” Boneparth says. 

By following best practices when filing disputes, you’ll significantly better your chances of having incorrect information removed from your credit report. You may not need credit today, but making sure your credit report is accurate will make your life easier down the line — and as long as you’re checking your report through the three credit bureaus, doing so won’t hurt your credit. In fact, it can only help. 

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Bad Credit

Young Entrepreneur is Proof That Age Does Not Matter in Obtaining a Successful Credit Score

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Credit score specialist Alex van Hulle runs a company that helps individuals and families find support to create a strong, long-lasting financial record. Alex has spent many years researching and understanding the crux of financial management. His dedication has paid off, enabling him to secure a solid future for generations to come.

Today, through Credit Alleviation, Alex uses his knowledge to help others benefit from the lessons he learnt. The company offers valuable practical tools and resources to clients who require help in managing their finances and maintaining a good credit score.

We designed the UCES Protection Plan to support our client’s financial opportunities by implementing positive habits to create and maintain a strong financial future. Our unique collection of services has been carefully selected to provide protection and opportunity over the many aspects of the client’s finances – all combined into one easy-to-use system”, says a spokesperson for Credit Alleviation.

Despite being young in years, Alex has accomplished much and continues to create an impact in the financial world. His most recent decision to provide premium education and motivation free of cost has singled him out in the industry. Alex has a strong commitment to see people be inspired to pursue a positive healthy financial lifestyle. He hopes that through this people would make the right decision for their finances.

Alex made up his mind to do this because he noticed that most people who want a buy a house, get a new job or upgrade their car get turned down because of bad credit. Lack of proper education and understanding of financial management is the main reason for their failure”, says a spokesperson for Alex van Hulle.

Through Credit Alleviation, Alex hopes that people would understand how valuable it is to take the financial matter seriously. Alex believes that if he can help people realize that securing a solid future and building wealth starts at a young age, it will lead to great things. Just like himself, others too can live debt-free and remain confident as they grow. He shares many years of experience in the industry and delivers professional advice almost daily to thousands of people.

This is why I continue to post more engaging content on my Instagram page, to encourage people to take their financial life seriously and build a better future”, says the young businessman and aspirant, Alex van Hulle.

Through his Instagram page @credit.alex, Alex van Hulle inspires his followers with motivational quotes, tips, and the latest credit score and finance information. Followers get advice on topics like debt, credit score factors, tax, credit restoration, loan payments, emergency funds, credit card management, creditworthiness, budgeting, etc.

Alex continues to influence many people, both old and young, to make wise financial choices. He uses a creative style of communication with his followers and viewers. It is no wonder this has made him a favorite avenue for getting financial tips that have helped the lives of thousands.

For more information, please visit: https://creditalleviation.org/

Instagram – @credit.alex

Media Contact
Company Name: CREDIT ALLEVIATION
Contact Person: Alex van Hulle
Email: Send Email
Phone: 813-503-9562
Country: United States
Website: https://creditalleviation.org/

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4 reasons why your mortgage application could be rejected

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Check yourself if you want to ensure your loan application is approved. (iStock)

When the Federal Reserve lowered interest rates to near 0% last year, mortgage rates followed suit. The average 30-year fixed-rate mortgage hit 2.65% at its lowest, and the average 15-year fixed-rate mortgage bottomed out at 2.16%. At publication, the 30-year FRM sat at 2.96%, and 15-year FRMs averaged 2.30%.

Despite economic uncertainty brought on by the pandemic, these low-interest rates increased enthusiasm in the housing market for potential home buyers. As more people flock to apply for mortgage loans, lenders are tightening their restrictions.

SHOULD YOU CONSIDER A 15-YEAR MORTGAGE? HERE’S WHAT YOU SHOULD KNOW

Unfortunately, many potential borrowers have been or will be denied a mortgage loan. Lenders consider several factors when deciding whether to loan money to a borrower. Not only do mortgage lenders consider income, but they also look at debt, credit score, and lifestyle factors. Within such a competitive market, you’ll want to make sure everything lines up if you’re going to get approval. (If you want to get a sense of what preapproved rates you’d get in today’s mortgage rates market, you can check out Credible’s lender marketplace).

There are a few primary reasons your mortgage loan application could be turned down in 2021:

1. Poor credit

One key factor that lenders consider when approving or denying a home loan is credit history. Your credit score is a quick way for lenders to decide whether you represent a trustworthy buyer. The minimum credit score required to purchase a home depends on the type of loan you want. You may qualify for an FHA loan with a score as low as 500 with a 10% down payment. If you want a conventional loan, you’ll need a score of between 620 and 660, and a jumbo loan requires a minimum score of 700. 

As lenders tighten their restrictions, borrowers who may have qualified in the past may find themselves shut out of a mortgage loan. 

In addition to your credit score, a lender looks at your credit report. You may not qualify for a loan if you have a history of missed or late payments, recent bankruptcy or foreclosure, or wage garnishments. In order to qualify, you’ll need to work on improving your credit score.

BUYING A HOME AMID THE PANDEMIC? HERE’S THE CREDIT SCORE YOU NEED

If you’re worried that your credit score is too low, you can potentially improve that bad credit by using Credible’s marketing partner Experian to boost your credit. You can add bills like rent and your cellphone payment to your credit score.

2. New or unsteady job

Lenders want to give money to people who have the income to make their monthly payments. They look for employment history and annual or monthly income history to determine if you can afford a mortgage. Ideally, you’ll have employment dating back at least two years. Lenders will want to see pay stubs and tax statements. 

However, if you’ve changed jobs recently or your work is more fluid (like freelancing), you may have to provide additional documentation to show that you can afford to make the mortgage payments. Alternatively, you could offer a larger down payment rather than a low down payment. 

Common ways to show income include:

  • Tax returns
  • Pay stubs
  • 1099 forms
  • Statements from investment income
  • Alimony or child support statements

When you’re looking for a loan, make sure to take advantage of an online mortgage calculator to help determine potential monthly payments. The loan payoff calculator can help narrow down your budget, so you choose a loan you can afford.

SHOULD I REFINANCE MY MORTGAGE TO CONSOLIDATE DEBT?

3. Large, unknown deposit

While having a sizable down payment can make getting a loan easier, having a history of large deposits into your account without records does not. It is perfectly acceptable for someone to gift you money, but you’ll need to provide documentation. If you have a family member or friend who contributes a large sum of money to your purchase, you’ll need to have them complete a gift letter stating the details of the transaction. 

When you’re ready, you can explore your mortgage options in minutes by visiting Credible to compare rates and lenders. Check out Credible and get prequalified today. 

4. Last-minute spending on a credit card or change to credit report

One of the most common reasons lenders deny a mortgage loan is a change in the credit report. Your lender can deny your loan up until you sign the final paperwork. If you’re approved for a mortgage loan and then use your credit card to purchase furniture for your home, the lender could deny your loan application.   

You can prevent having your loan rejected this way by planning. Avoid taking out any loans – like personal loans, auto loans or student loans – or spending too much on your credit card a few weeks before you apply for a mortgage loan. Additionally, don’t make any major purchases until after you sign your final loan documents and the key to your new home is in your hand. 

HOW MISSING A MORTGAGE PAYMENT CAN IMPACT YOUR CREDIT SCORE

Are you ready to see if you qualify for a mortgage loan? Explore your mortgage options by visiting Credible to compare rates and lenders. 

Obtaining a home mortgage loan this year could be challenging. But, if you manage your spending, work on your credit score, and keep good financial records, you can substantially improve your chances of approval. 

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Can You Get A Student Loan With Bad Credit?

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Borrowing a student loan with bad credit can often be a challenge, but it is possible. If you have bad credit, federal student loans are a great place to start, but you can also look into getting a co-signer or finding a lender that uses other factors to determine your eligibility. Here’s how to start.

Options for student loans with bad credit

When you’re shopping for educational loans, any options you review will fit into one of two categories: federal student loans or private student loans. As a borrower with bad credit, you’ll encounter different benefits and drawbacks with each loan type.

Federal student loans

Federal student loans are a form of education financing that’s funded through the U.S. Department of Education. You can use the proceeds from federal student loans to help cover expenses such as:

  • Tuition.
  • Fees.
  • Books.
  • Room and board.

If you have credit problems, federal student loans are typically the best place to start. Most federal student loans do not require a credit check to qualify for financing, so bad credit won’t be an obstacle in most cases. PLUS loans are the one exception; these loans will check your credit, although they’re only looking for an adverse credit history and don’t have minimum credit score requirements.

Federal student loans do feature borrowing caps. As a result, these loans might not be sufficient to cover all of your educational costs.

Private student loans

Private student loans are a type of education financing that’s available through private lenders. Online lenders, banks, credit unions and even colleges and universities themselves may offer private student loans.

With a private student loan, the lender will almost always check your credit as part of the application review process. When you have bad credit, securing a private student loan may be a challenge. Bad credit can also impact the interest rate and loan terms a lender offers you — potentially making it more expensive to borrow money if you qualify for financing.

Many private student loan lenders will require you to have a minimum score in the mid- to high 600s to qualify for financing. However, the lender may allow you to apply for a private student loan with a co-signer if you are worried that you won’t be eligible on your own. Just keep in mind that co-signing for student loans comes with its own drawbacks, such as the risk of credit score damage for your loved one.

Most of all, it’s important to conduct your own research if you’re considering a private student loan for bad credit. Comparing offers from multiple lenders has the potential to save you money on interest rates, especially with bad-credit student loans. Over time, those savings could add up to a significant amount of cash.

How to improve your credit score before applying for a private student loan

Because your credit plays a key role in the approval process, it’s wise to make sure that your credit score is in the best shape possible before applying for a new private student loan. Better credit may improve your approval odds and could help you secure better rates and terms when you borrow money.

Here are four steps you can take if you want to improve your credit.

  1. Check your three credit reports. As you review your credit reports, make a list of any information that seems inaccurate and any negative items you need to address. You can claim a free copy of each of your three credit reports weekly at AnnualCreditReport.com.
  2. Dispute credit errors. Millions of Americans have errors on their credit reports. Some credit reporting mistakes have the potential to damage your credit score. If you discover errors on your credit report, it’s wise to dispute them right away.
  3. Lower your credit card utilization. A high balance-to-limit ratio on your credit cards can be bad for your credit score, even if you make your payments on time. You can lower your credit utilization rate (and likely save money in interest) by paying down your credit card balances. A credit limit increase is another out-of-the-box way that could help you to lower your credit utilization if you can’t afford to pay off all of your balances at once.
  4. Establish positive credit. If your credit report is thin, adding some new positive accounts to it might benefit you over time. Keep in mind that you may want to start with accounts you’re likely to qualify for despite having bad credit or no credit. Secured credit cards or credit builder loans may be worth considering here.

The bottom line

Can you get a student loan with bad credit? There’s a good possibility that you can, and your best bet is starting with federal student loans. But if you need private student loans to help finance your education, bad credit could make borrowing money more difficult and more costly.

Focus on improving your credit as much as possible before you apply for financing. And remember, if you decide to accept an interest rate that you’re not thrilled about now, you can always refinance your student loans in the future.

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