What about those companies claiming to provide services to improve my credit score and fix my credit?

Before you choose to work with a service promising to improve your credit file and raise your credit score, be wary of any offers or promises that seem to good to be true. In fact, raising one’s credit score is not some feat of easy magic; it takes lots of careful planning and following through on those plans. There is no legal way to wipe out your credit file and start over, or to create a new identity to remove any records of liens and bankruptcies.

If you do decide to work with a credit counseling service, make sure to choose a trustworthy and reliable company. Keep in mind warning signs of illegality such as non disclosure of legal rights, demanding payments before any actual service is completed, working with you to start a new credit identity, or advising you not to contact any credit reporting bureaus. Check with the Better Business Bureau to verify company practices and past client satisfaction. Also, be sure you know that according to Credit Repair Organizations Act, any company must complete their services to improve your credit score before asking you for any payments.

What are some important regulations regarding credit reports and scores that I should be aware of?

There are two important government regulations that you should know with regarding to getting a free copy of your credit report and improving your credit score. First, you are entitled to receive a free credit report each year (once every 12 months) from each of the three major credit reporting bureaus in the US (TransUnion, Equifax, and Experian). The other important regulation is that if a company is initiating an adverse action against you based on credit report, credit history, or credit score such as denial of credit account or employment, then you are allowed to request a free copy of your credit report within 60 days. These access to you free credit report can help you identify any errors or areas in your credit history which may be hurting your credit score.

I found some errors in my credit report which are negative items that lower my credit score. How do I dispute these items to have them removed from my credit report?

To dispute an error or inaccuracy in your free credit report (especially when it is a negative item which is hurting your credit score), you will need to contact each of the credit bureaus with which there is a problem with your credit file. Send them a copy of your credit report with the item in question highlighted as well as supporting documentation and proof of your position. In response, the credit bureau is required by law to investigate the matter and present their findings to you. If they find that the item in your credit report is an error, they will notify the other two credit reporting agencies. Even if the credit agency finds that the item is not an error, you can request that a statement of dispute initiation for the item be included with copies of your credit report that is requested from that agency.

In the end, if the negative item cannot be disputed and removed from your credit report or credit file, only time will help. Items generally stay in the credit history for a period of seven to ten years, after which they will be removed as long as the items are not items involving criminal matters and records.

I have poor credit history, with some negative items which are in fact correct and unable to be removed except by the passing of time. This has resulted in a credit score that is lower than what I would like. Am I in big trouble for getting approved for credit or loans?

Keep in mind that if you have some negative items in your credit file that is hurting your credit score, this is simply an opportunity to work hard at planning a budget and following through with that plan. While it is true that you may have to pay some higher fees and rates for some credit accounts or loans, it also does not mean that creditors, lenders, and banks will automatically reject any of your applications. If you are having problems paying your current balances on credit accounts, you may opt to contact the creditors directly to see if they will work with you to figure out a more reasonable payment plan that you can stick to. You might also want to visit a credit counselor to give you advise on budgeting, planning, and improving your credit score.

My credit card balances that I carry each month is about 50% of the total of my credit accounts; in fact, it is just over 50%. Is this going to be a source of problems?

Yes, you should not carry monthly balances over 50% of your total credit lines, since this will significantly drag down your credit score. If you find yourself in this situation and are able to, work hard on paying off some of the balances so that the total does not occupy over 50% of your total credit lines put together, and in turn your credit score will improve pretty significantly.