Checking your credit nowadays is so much easier than it was 20 to 30 years ago.
Resources like Credit Karma keep you up to date with any changes to your credit score. They will also let you know if your data has been compromised.
Many credit card and bank apps now have a feature that allows you to check your score for free.
There really is no excuse in this day and age not to be on top of your credit!
When I was a freshman in college, over 25 years ago, the credit card companies would set up tables on campus. In my opinion, that’s the original form of predatory lending: trying to get a bunch of 19 and 20 year olds to start the journey of credit ruin.
Unfortunately, at one point or another, many people will find themselves in a position of having mismanaged their debt. Whether it’s due to not paying on time, or to a sudden loss of income, accounts in collection and charge-offs will destroy your credit score.
No matter how damaged your credit is, however, you can rebuild it.
I’m not a fan of credit repair companies, because sometimes they try to implement a quick fix that will boost your score but only last temporarily.
The truth is that rebuilding your credit score is very simple. Here’s how it’s done:
Accounts in collection: Negotiate with the collection agencies to pay off the debt. If you owe $2000, and you happen to have $1000 available, you could probably settle the debt with $1000. Once it’s reported to the credit bureaus that the account has been paid, your credit score will increase.
After a bankruptcy or repossession: These kill your credit score. Once they’re on your report it will take seven to ten years for them to come off. The only thing you can do in this case is to continue to pay your other lines of credit on time. Over time, your score will gradually improve.
Accounts that don’t belong to you: If you find an account on your credit report that you never opened, and are positive it doesn’t belong to you, you should write a dispute letter to each credit bureau (Equifax, Experian, and TransUnion) reporting this information and informing them that the account does not belong to you.
They have 30 days to either a) provide you with proof that the account is in fact yours or b) remove it from your credit report.
Identity theft in the information age is rampant, and something we all have to be on the lookout for. You should make a habit of checking your credit quarterly. The sooner you identify false information, the faster you can deal with the problem. It can take over a year to clear up your credit due to being a victim of identity theft.
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