Seventy-five percent Americans, or perhaps, more have one or more inaccuracies in their credit reports?
Inaccuracies in your report can negatively affect your score, a factor taken into account while calculating the mortgage interest rate.
Credit Score and Mortgage Interest
The lower the credit score, the higher the interest on mortgage.
Credit score ranges from 300 to 850. In general, a score less than 520 will not qualify for mortgage. The best interest rate and the maximum varieties of loans are offered to homebuyers with a score in the top tier, between 760 and 850. A score of 620 or less falls in ‘subprime’ category, resulting in higher interest rate and fewer loan options.
A below par score can result in hundreds of dollars of extra payment each month till the expiry of the loan period. You can save this amount by fixing the inaccuracies, if present, in your credit report.
Fixing Inaccuracies in Credit Report
The first thing you will need to start credit repair process is, but of course, a copy of your credit report. Each of the three main bureaus offer one free copy a year; that is, you can have one free copy every four months.
Next study the report to identify the inaccuracies. Highlight them and collate supporting documents to back up your claim. Finally write correspondence to the bureau from which you procured a copy to bring the identified inaccuracies to their notice.
The bureau is obliged by law to conduct investigation and revert to you in thirty days.
Solo Vs with a Professional Service
You can conduct the repair operation in two ways: on your own or with help of a professional service.
The procedure and the timeline are the same in both the cases. While a professional service can’t hurry up the repair process, it can ensure that reported inaccuracies are properly filed and a resolution is effected from the bureau the first time.
They will also correspond with the bureau and lenders—a no mean job given the legal nature of the correspondence. You also can make use of their consultation about how to keep your credit score at par or above in the future. Generally, credit repair agencies don’t charge clients any fee for this, but they do give valuable tips to manage personal finances better.
With that said, there’s no reason why you can’t resolve inaccuracies in your credit report yourself and take necessary steps to improve your credit score.
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