Resist the urge to rush out and hire some company that promises to improve your credit score. Many of them employ illegal and unethical tactics that can get you in serious trouble. For the honest ones, you can do the same things yourself, and save the fee. Start working on your credit score six to twelve months before you want to borrow money. The time will pass fairly quickly, and you can shop for potential investments at the same time. Below are some general guidelines for improving your score.
There is some truth to that. If the credit reporting agency receives multiple requests for credit reports on you but no credit is granted shortly afterward, it assumes that you were turned down. Even with a good credit score, this might indicate that the local lenders know something about you that the credit reporting agency does not. Furthermore, multiple attempts to borrow money, without a loan resulting, seems to indicate a growing financial crisis. On the other hand, your credit score does not take into account any reports granted within the prior thirty days. As a result, shopping for the best financing terms, shortly before receiving a loan, will not affect your score. In addition, several requests within a short time period, usually two weeks, indicate you are only shopping for the best deal. All of them will be counted as if there was only one request. If any of your existing creditors ask for updated reports for monitoring purposes, no matter how often, it does not decrease your score. Finally, you can obtain as many credit reports as you want on yourself. None of them will reduce your score.
Federal consumer protection laws - the Fair Credit Reporting Act - require credit-reporting agencies to remove any incorrect or outdated information from their files on you. If you give the agency a written protest regarding a specific item, they must check with whatever creditor reported the bad information about you. That creditor has thirty days to get back with the credit-reporting agency and either admit the mistake or confirm the information is accurate. If they admit the mistake, it is taken off immediately. If they do not answer at all within the thirty days, it is taken off immediately. If they confirm the information as accurate, then you will have to fight it with the creditor, not with the reporting agency.
This technicality - failure to confirm accuracy within thirty days - is what many unethical companies use to clean up their customers' credit reports. They tell their customers to protest everything. By the law of averages, some creditors will fail to answer on time, even though the information is accurate. This is highly unethical and it is illegal. Do not fall into that trap. It is far better to improve your score over time, the right way, than take shortcuts and possibly cause yourself more problems. By law, information that is too old must be removed, even if it is accurate. It is sort of a statute of limitations on bad credit information. One exception is if you are applying for a loan of more than US Dollars 150,000 - in that instance, the old credit information can still be reported. As a practical matter, the credit reporting agencies do not disclose this information, even for larger loans.
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