Credit report, credit score or simply credit; these seemingly harmless terms can affect all your major financial decisions. From buying a new car to purchasing a new house or something as simple as getting a credit card, your credit score is going to have a say in all of these major developments of your life. Your credit score is determined by credit bureaus who take your past credit history into account. They use a number of facts and figures to come up with the final credit score. However, it is not always the case that they are right in their calculations. They are humans and they make errors. If you happen to find out your credit score and are not sure how it ended up being so low, you can always run a credit repair on it through an experienced credit repair service.
When it comes to the world of credit, ‘data’ runs everything. While some minor errors in the data may seem like a pretty harmless thing, they can have a huge impact when we see the overall picture. And with these simple and minor errors, it is possible that someone’s credit report is ruined, which will affect their present and future financial decisions.
Just as any other industry, the credit scoring industry also has some facts and fiction associated with it. We need to be able to distinguish between these facts and fallacies to be able to understand our credit report and run an objective eye through it.
Talking about facts about credit score and the credit scoring industry, here are some that are reported by industries on minor things but can have huge impacts. Some facts include:
- As per the CFPB Report, 12/2, as many as 25% to 79% of the credit reports contain material errors. It is important to note that even a decimal in the wrong place can cause a huge impact on your credit score and can affect your financial future.
- As many as 77 million Americans or 35% of the adults with credit file have a report of debt in collections.
- Half of all collections tradelines appear on credit reports and are reported by debt collectors who collect on medical bills that are claimed to be owed to hospitals and other medical providers. This tends to affect the credit score of the common man which reflects in the financial decisions in the present or the future.
What is the Way Out?
So, you have a bad credit score and a bad credit report.
What is the way out now?
First things first, you don’t have to believe everything that the creditors and the ones seeking collections tell you. It is important to not take the above-mentioned facts for granted. You should know what facts to check and what questions to ask.
A credit score was never meant for the consumer. In the 1980s, it was implemented so that the banks and lenders could find the creditworthiness of the consumers based on an algorithm. So, it is not a surprise that there are still many outstanding misconceptions in the mind of the consumers when it comes to their credit score. And, it is mostly the things that hurt the credit score more than what helps it. In a recent survey, it was found that 42% of the Americans prefer their credit score to be a letter grade than the traditional 3-digit number. This is because a letter grade allows the consumers to understand their credit score better than what comes with numbers.
There is No One True Credit Score Model
While there are some widely known credit score providers— FICO being the top contender— it is important to understand that there is no one true credit score. In fact, there are dozens of models out there for credit scores that are generated by different credit bureaus. These models are also unique to different industries. The idea of risk assessment is also not consistent and is different from lender to lender and industry to industry. So much so that the credit score pulled by one credit card issuer may differ between 5 to 50 points from another credit card issuer.
Thus, you cannot be sure of what credit score the lender will assess you on until they have pulled the credit score. It becomes difficult for consumers to keep track of so many credit scores at once. Therefore, it is important to always ask for evidence when you are given a specific credit score. The acts and regulations governing the credit industry demand that the consumers must be shown evidence of their credit scores. However, this information is often withheld by the creditors and the consumers don’t ask questions because they are not sure about what to ask.
Get Your Facts Right
Your credit score affects all your present and future financial decisions. Therefore, it is important to know what to ask for so that you can be in charge of your own facts. Leaving your facts in someone else’s hands is always dangerous. Get your information from the companies that hold your information and know your rights. When it isn’t provided, you can always come to Your Rocket Credit for help. We will help you seek damages that most people don’t even know they are eligible for. We are one of the best credit repair companies that understand the importance of your credit score and offer education on how you can improve it. We also try our best to educate our customers on the questions they should ask the credit report bureaus and also find out the discrepancies, if any, in their credit report.
We have an experienced team of professionals who have a wide experience of credit report repair. Not only do we offer credit repair services, but we also educate you on the steps you can take to improve your credit score. Our team will be your support system at every stage of your credit improvement through easy do-it-yourself credit repair steps.
Get in touch with us at 830-822-2436 to get started.