The coronavirus pandemic has been a mental and physical drain for Americans. And during this global crisis, many consumers faced the added stress of dealing with financial services companies that didn’t always follow the rules or were slow to move when the federal government suspended certain loan payments during the pandemic.
The CFPB’s annual consumer response report reveals that credit report inaccuracies more than doubled during the pandemic, signaling dissonance between the laws that were introduced to help consumers during the pandemic, and how servicers reported suspended payments to the credit bureaus.
And it sometimes left consumers to deal with the consequences on their own.
How to Fix Errors On Your Credit Reports
Credit relating to pandemic forbearance programs include incorrect recordings of missed payments or deferments, which can be found in each account section of a credit report. Some forbearance programs started as early as March 2020 and are still applicable, including federal student loan forbearance.
Still, get ready to roll up your sleeves Errors can be tough to remove, If you find an error on your credit report. The FCRA gives consumers the right to dispute incorrect or inaccurate information on their credit reports, and requires bureaus to correct it.
The FCRA makes credit reporting companies and information providers responsible for correcting inaccurate or inaccurate information on a credit report. The Federal Trade Commission lists the way consumers can take to correct credit report errors
Write a dispute letter to the credit reporting company. Include the information you suppose is inaccurate on your credit report, similar as a recording of a missed payment during the forbearance period. This information will be found on your credit report under the payments section for the specific loan or credit account. The FTC provides a sample dispute letter template then and advises consumers to include copies of any documents that support your dispute, while also explaining why you dispute the information and explicitly request that it be corrected.
Be sure to send this letter by certified correspondence with a return receipt requested so you know exactly when the credit reporting company received it. All three of the major credit bureaus also have online options to file credit report disputes, and third party credit monitoring apps including Credit Karma occasionally allow you to file disputes directly through their platform.
The credit agency must investigate the details in question, generally within 30 days, unless it considers your dispute to be “ frivolous” — meaning it’s not a serious or real dispute. The credit agency is also needed to further your information about the inaccuracy to the association that provided it, similar as a credit card company or loanservicer.However, it must notify all three agencies so they can fix the information in your credit report, If that association finds the disputed information is in fact incorrect.
Gain results from the credit bureaus investigation. Credit bureaus are required to give you the results of their dispute in writing, as well as a free copy of your credit report (s) if your dispute results in a change.
Request notices ofcorrection.However, you can request the credit reporting company to send notices of any corrections to anyone who received your credit report in the past six months, If your dispute is successful and a change to your credit report is made. You can also request a corrected copy be sent to anyone who received a copy during the past two years for employment purposes.
Request a statement of the dispute be included in your file and futurereport.However, meaning the credit reporting company does n’t resolve the error, also you should request a statement of dispute to be included in your file and future reports, If your dispute is ineffective. This statement will indicate that you don't agree with the recorded information and you made an attempt to have it removed from your report.
Write a dispute letter to the information provider. In addition to the steps listed above, be sure to inform the information provider ( similar as a credit card company or loan servicer) that you ’re disputing incorrect information on your credit report. Use the same sample letter as the one used to inform the credit reporting companies. The process of investigation will be the same, and the information provider will have to inform the credit reporting company of your dispute if it’s found to be correct, and it'll also be required to tell the credit reporting company to update or delete the inaccurate item.
If your credit score isn't what you'd like it to be, don't worry. You can take steps to raise it and improve your financial situation.
A high credit score can lead to lower interest rates on credit cards, personal loans, student loans, and even mortgages. As a result, you'll have lower monthly payments, which allows you to put more towards other goals, such as paying off debt, beefing up your emergency fund, or contributing more to college or retirement.
However, a good credit score has more benefits than just low interest rates. It may sometimes affect whether you qualify for a job or a new apartment.
Increasing your credit score takes time, patience, and determination, but the results are well worth the effort. The hardest part is getting started. Use these tips to get started.
1. Pay your bills on time
Payment history is the most important factor for your FICO and VantageScore, according to Experian. From a lender's perspective, a history of timely payments indicates that you'll stay on top of your debts.
2. Keep your credit utilization rate low
Compare your balances to your credit limit to ensure you're not using too much credit, a risky practice.
As a rule of thumb, it's recommended to maintain a 10% utilization rate. Your utilization rate may also be affected by the date on which your credit card provider reports to the credit bureaus.
With high balances and mounting interest payments on your cards, consider consolidating with a 0% introductory rate balance transfer credit card, but make sure you understand when and by how much the rate will increase.
3. Leave old accounts open
Closing your credit card account can actually lower your credit score since you will now have a lower credit limit. Keeping balances on other credit cards or loans will increase your utilization rate.Therefore, keep the card with a balance of $0 instead.
4. Only apply for credit you need
Each time you apply for a new line of credit, a hard inquiry is made on your credit report. This lowers your credit score temporarily. Do not apply just to see if you are approved or because you have been prequalified.
5. Be patient
You won't see a dramatic improvement in your credit score overnight. The best way to achieve a high credit score is to develop good long-term credit habits.
Establish good habits, such as paying your balances on time, keeping a low utilization rate, and only applying for credit when you need it, and you will see the impact on your score over time.
6. Monitor your credit
Monitoring your score’s fluctuations every many months can help you understand how well you’re managing your credit and whether you should make any changes. Still, you shouldn’t make any final decision you make solely on your credit score.
7. Consult with a credit expert
If you're unsure if there is a mistake on your report or you're having trouble getting the mistakes fixed, call for help.
Clover Credit Solutions will know how to identify and correct erroneous information on your report and help increase your scores.
If you'd like your free consultation give us a call!