Debt Control – Accurate Negative Information in Your Credit File


Controlling your debt is crucial whether you want to sign up for a credit card, take a loan or find a new job.

If the black marks on your credit rating are accurate, it can take a year or more of timely payments to improve your credit score. If you take a loan and don’t repay it you may have a judgment levied against you by the court system.

That information will stay on your credit report for 7 years. If you filed for bankruptcy under what is known as Chapter 7 you would eliminate the debts you owe but create a negative report on your credit that will remain for ten long years.

The Credit Bureaus

Credit bureaus do make mistakes. Obtain a copy of your credit report at least once a year to see what negative information is listed.

This is a simple, but yet effective strategy you can adapt. If there is a bad item on your credit that is incorrect, you can request in writing that it be removed. The Credit Bureau must investigate and if you are right the item will be removed.

For young adults the most common problem with credit reports is a lack of credit history. It’s frustrating as you can’t establish credit without making payments – and can’t get approved for an online loan or credit card because you have no credit history.

If you use a local bank for your checking account, open a savings account there, too. It doesn’t need to carry a large balance but do make regular small deposits into it.

Talk to a manager at the bank you use and ask about getting bank credit card with a low limit. If that is approved you can start building a credit history.

Make a few purchases using the new credit card but don’t pay in full when the bill arrives in your mailbox. Instead, pay two to three times the minimum amount due on the account each month for six months and then apply for a department store card and do the same.

Avoid Applying Too Often

Do not fill out loads of card applications in a short period of time. Too many requests about your credit history coming in a short period of time can red flag you with the credit bureaus.

Though you’ve been making regular payments, you may find some of your credit cards are not listed on your report. This happens often with department store and gas credit cards. Some smaller credit unions don’t report loan payments to credit agencies unless you are behind on the payment.

If you notice good payment records absent from the credit report you can ask to have them included. Some bureaus require a small fee but every good piece of financial information helps to balance any accurate negative information and eventually the good payments will reduce the impact of the negative payment info.

Your Credit Report is Checked Often

You may not realize how often your credit report is used to make a judgment about you as a person. Many employers will check credit ratings of job applicants; landlords will check credit of those wanting to rent an apartment.

When you buy life, auto or property insurance the major providers check your credit once or twice a year. If your credit file shows a record of late payments or failure to pay you may be charged more than those with good credit ratings.

If you have nothing but bad reports listed you may need to look for credit counseling to help you learn to manage your money and how to set up a workable budget. Dealing with credit files is not a fun way to spend your time.

It’s easy to be optimistic and convince ourselves that the few times we were late on our payments was no big deal. The shock of being denied for a credit card or refused a car loan is often the first clue that your credit may not be as great as you thought.

Request your credit reports now and look them over carefully. If there is accurate negative information on them, is it correct? If not, take action to have it removed. If it does reflect how you spend your money, it’s time to learn how to manage your money.

As you realize, there are a lot of reasons for why controlling your debt is crucial for your well being. However, if you fail to keep it under control, you will surely make your economy life much more difficult.