Submitted By Renee Backus, Credit Specialist
Credit Restoration is perhaps the single most powerful method of increasing a person’s credit score. Achieving the highest score possible can drastically affect the house we live in, the car we drive, and the cost of interest and insurance rates we pay. Credit scores are critical to our quality of life… and for many, credit restoration is the key to obtaining the highest score possible.
What is Credit Restoration? Simply put, it is the removal of derogatory information from your credit report. Your credit score is a calculation of the data in your credit report, including positive things such as payments made on time, as well as derogatory items such as late payments, collections, judgments, tax liens, etc. Obviously, the more positive information and less derogatory information – the higher your credit score.
Most people don’t realize that information stays in their credit report for 7 years or longer, even if the item is paid. So by removing some of the derogatory information from your credit report now, instead of waiting 7 years, credit restoration can dramatically increase your credit score now.
How does it Work? Studies have shown that nearly 30% of all credit reports contain serious errors resulting in the denial of credit. Because of this, the Fair Credit Reporting Act includes provisions that allow consumers to dispute information in their credit reports with the credit reporting agencies (CRA's). Upon receiving a dispute, the CRA's have 30 days to verify the information reported by the original creditor. If the information is deemed inaccurate or unverified, then it must be deleted entirely from the credit report. As derogatory items are deleted from the credit report, credit scores increase.
In addition to disputes made with CRA's, other dispute strategies can be used directly with creditors using the Fair Debt Collection Practices Act and Fair Billing Act. Using dispute strategies to challenge information in our credit reports often can result in half or more of the derogatory items being deleted from a credit report. This can make a profound difference on the credit score, often increasing it by 100+ points!
Renee’ Backus is the co-owner of Credit Matters, Inc., a registered Credit Service Organization with the State of Wisconsin. Since 2003 Credit Matters has assisted over 3000 consumers and small business owners with credit restoration and consultation services. For assistance with your credit management or score improvement needs, call me at: 866-895-4490.