How To Protect Your Credit At All Costs?
Your credit score is more than just a number - in many ways, it is the key to the next decade of your life. It is what determines how likely you are to get approved for the mortgage on that home you have always wanted to own, or what type of interest rates you will be forced to pay the next time you apply for a personal loan or a credit card or even how much you pay for auto insurance!
Your credit score, by its very nature, is also an imperfect system. Consider the fact that according to a 2012 study conducted by the FTC, one in five (!) consumers were found to have at least one error on their credit report that was corrected ONLY AFTER they initiated the formal dispute policy with a credit reporting agency. 20% of these affected customers found that the errors were so significant that once corrected, they experienced a decrease in their credit risk tier.
However, these issues go beyond "honest mistakes," too - many creditors and even collection companies will purposely leave inaccurate and defamatory information on someone's credit in the hopes that it will make them more likely to pay a debt at a later date. This is not just morally wrong. It is also illegal under the Fair Credit Reporting Act.
Bankruptcy and Credit Report Problems: What You Need to Know
Whether you are thinking of declaring bankruptcy, have already begun the proceedings or are just trying to protect your credit in any way that you can, the number one thing that you need to know about is the Fair Credit Reporting Act.
Under the Act, a creditor (and associated credit reporting agencies) need to fix any inaccurate information within 30 days of you notifying them that there is a problem. Sadly, this is not always the case. Credit agencies are large organizations, and sometimes problems fall through the cracks, while creditors cannot always be trusted to be 100% honest when money is on the line.
Just a few of the common situations that fall into this category include but are not limited to ones like:
- A creditor reporting that a past due account is active when it has, in fact, already been closed.
- Re-reporting debts after they have reached maturity, causing them to stay on someone's history for over their seven-year lifespan.
- Creditors reporting an account as past due, even when you have always been current.
- Failing to report that a particular form of debt has been discharged in bankruptcy, even tho it was astutely included in the filings. There is an entire industry trying to get discharged debt paid through "forward flow" agreements.
Getting a fresh start with your credit is important, and bankruptcy is just one of many ways to do that. However, even something as seemingly "definitive" as bankruptcy is not necessarily the end of the story. The sad fact of the matter is that you cannot always trust creditors, to be honest, and credit agencies are notoriously slow to catch and fix mistakes on their own, which is why being proactive is always recommended.
Welke Law Firm
When you are talking about something as important as your credit score, you literally can't afford to leave anything to chance. If you would like to find out more information about protecting your credit score, or if you would like to sit down and discuss your own personal situation with a legal professional with decades of experience in this very topic, please don't delay - contact Welke Law Firm today.