Credit scams and frauds
It can be frustrating when you are overwhelmed with debts and desperate to pay all of them but don’t know where to start. You might encounter scams that are disguised as “credit fixers.” It would be best if you were careful in choosing a credit repair company.
Scams and frauds are just around the corner. If their claims are too good to be true, examine the company well. If it’s too suspicious, don’t let it get into you.
“Credit problems? No problem!”
“Erase bad credit! 100% Guaranteed.”
“Remove Bankruptcy and Lien from your credit.”
These claims are too good to be true. And there is no way you can erase a credit problem. There is no quick and easy way to erase credit.
These companies often vanish and run with your money. It would help if you were extra careful in choosing the right company.
Your credit history is maintained by private companies that collect information from banks and lenders, so it is impossible to erase bad credit. You can only dispute incorrect data. Other than that, accurate adverse details will last for up to seven years on your credit report.
No matter your reason, only time can fix your credit score. If there is a genuine error on your credit report, you can always fix it yourself.
Start by getting your credit report and reviewing it. Create a financial budget and stick with it. Or you can also consider consulting credit counseling. With this method, you can fix your credit on your own.
What are the negatives that impact your credit report?
1. Late or non-payment
– late and missed payments has a significant impact on your credit score. If you are overdue on payment by 30 days, according to Equifax, your score can drop up to 100 points.
2. Having charge-off
– a charge-off is when your creditor declares that a debt is unlikely to be collected. A charge-off can drop your score by up to 100 points.
– when you file for bankruptcy, it can stay on your credit report for up to 10 years. 200 points or more can be lessened on your credit score if you declare bankruptcy.
– foreclosure can cause up to 100 points deduction on your credit score.
– car repossession can also decrease by 100 points on credit score.
– this, along with the tax lien, stays on your credit report for up to seven years. It can also drop your score by 100 points.
– outside firm to collect payments due on a debt, categorized as payment history, scores can drop over 100 points.
5 categories calculate your credit score.
1. Payment History (35%)
2. Amount owed (30%)
3. Credit History length (15%)
4. Credit mix (10%)
5. New debt (10%)
A low credit score hinders financial stability and can only cause trouble for you in the future if not taken care of immediately. Your credit score will be the base of your creditworthiness.
What is identity theft?
When someone is using your name and information, that’s identity theft. Various individuals do this. That is why checking your credit report often is a must.
When you are sure you are paying your payments regularly, your credit score keeps lowering. That could only mean one thing, someone is using your accounts without you.
Here are some things to do when you encounter identity theft:
1. Monitor your credit report more often.
– you have to regularly check your credit report to dispute any errors. And to trace any signs of identity theft as early as now.
2. Report suspicious information
– any information or activity on your credit report unfamiliar to you, report it. If not, your credit score will suffer, and you’ll have more troubles in the future.
3. Freezing or locking your account temporarily
– temporarily locking or freezing your account while you report suspicious activities will stop that kinds of activities.
4. Contact law enforcement and file an identity theft
– it is the best way to deal with identity theft.
5. Set up a fraud alert
– setting up fraud alerts can also stop frauds from using your accounts. You’ll be notified once an unauthorized individual uses your credit.
Identity theft is, unfortunately, a common issue when it comes to credit reports. So staying vigilant when it comes to protecting your credit is a must. Credit improvement companies’ help will be needed if something like scams and fraud happens.
Avoiding scams and frauds is easier than credit repair because of them. It’s not that hard protecting your credit and what is rightfully yours.
Maintaining your credit score above average will only benefit you later. You’ll be the only one who can protect and benefit from it.