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.
