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Credit Score – Clearing The Air

By Sally Maison
Published: Wednesday, April 28th, 2010

PIXTAL-00016586-001Most economists advise customers’ to check their credit score on a regular basis and be watchful for identity theft and credit fraud.  It’s not uncommon for even a customer who diligently checks their credit to be caught unaware of what the information in their report means. Samuel S Ambrose, Vice President of Marketing and Operations for a financial organization mentions that “By now, consumers know that they should monitor their credit regularly, But many people don’t have basic knowledge and an understanding of their credit report and score to use this information to make credit-related decisions.” 

Some things you ought to know about credit reports 

  • Checking your credit does not cause your credit score to drop. Inquiries from lenders however do have the ability to affect your credit rating by a few points; a couple of inquiries back to back and you might see a change in your score. Simply put, a credit monitoring service is safe and will not affect your score.
  • Negative marks on your credit report remain on your report for seven to ten years, after which they are pulled out. Don’t despair if you have missed a payment; make it as soon as possible to avoid further damage. Most people have a few red marks on their report, its nothing that a few years of good debt management can’t handle.
  • Your salary and job profile do not affect your score. Just because someone has a high income, doesn’t oblige a good credit rating for him or her. Some people with higher incomes tend to have better credit ratings for the simple reason that they earn more; however there are many people with high incomes who still have bad credit due to mismanagement of debt.
  • Inaccuracies should be disputed. Inaccuracies in your credit report can be easily disputed and all you would need to do as a consumer is inform the credit reporting agency. They are required by protocol to look into your complaint within the next 30 days. Ignoring an inaccuracy can prove disastrous; a bad credit rating can affect the interest rate of every other loan or credit card you apply for, for the next ten years. 

The best way to abstain from bad debt management is to regularly assess where you stand, request credit reports regularly. Take the time to understand your credit report and make short term and long term plans on how, and what you can do to improve your credit score.

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