By Charlie Burns () - March 8, 2019
Can a Poor Credit Report Be Fixed?
You may have heard about the benefits of refinancing your car loan—with just a little bit of effort, you could end up saving hundreds or even thousands over the life of your loan. But what if you have tried to refinance but have gotten turned down because of your less-than-stellar credit score?
It’s easy to despair over a downturn in your credit, but it’s much more productive to do something about it! Having ups and downs in your score is not that unusual, frustrating as it may be. However, it’s a mistake to just accept this truth as gospel and give up on your hopes of refinancing.
The first step is to make sure these credit reports are even accurate. Every U.S. citizen is legally entitled to review their credit report for free each year at each of the major credit bureaus—Experian, Equifax and Transunion. The report lists your previous addresses, phone numbers and payment status on your credit cards, home mortgages, home equity lines of credits and other debts.
There are dozens of ways a mistake could be made, so it’s a good idea for everyone to check their credit report quarterly, whether you are applying for credit or not—better find problems early than let them catch you by surprise down the road. The list of mistakes or problems could include:
If you find inaccurate information on your credit report, the next step is to report these issues to the credit bureaus so they can correct them. The company is required by law to investigate disputes and update you and the other major credit bureaus. Though the process may seem like a lot of bureaucratic effort, it’s important to fight any impulse you may have to let things slide. It’s well worth your while to spend time working through these errors now and checking your credit frequently to follow up. Ongoing credit monitoring services are available for this purpose.
Those who don’t have the time or ability to work through these issues on their own can turn to an outside credit repair service for help. These services can communicate with credit bureaus on your behalf and work to remove incorrect items—but their role is not to remove unfavorable information that is actually correct.
The most important thing you can do to repair your credit is to change your habits. Be sure to start paying your bills on time, every time—even if you are only paying the minimum amount due. At some point in time—seven years for most items—the time limit for posting these negative items will pass and they eventually will be removed from your report automatically, providing you with much more financial freedom.