Credit Repair

How Does Credit Work?

By | Credit Repair, Credit Reports, Credit Scores, Personal Finance, Your Credit

how does credit work

You hear a lot about building credit, using it, protecting it and repairing it. At some point, you may have paused to wonder exactly what credit is, and how it works. Here’s your basic introduction to this vital engine that drives today’s consumer marketplace.

The word “credit” usually refers to a person’s ability to borrow money. When we talk about good or bad credit, it’s a shortcut for referring to someone’s track record on handling finances. Your credit score is a number attached to this track record. When you request a loan or a credit card, the lending institution considers the likelihood that you’ll pay back what you owe.

Your credit score tells the lender how big a risk it’s taking if it lends you the money. Like any investment, the bigger the risk, the better the payoff for the investor. For this reason, some lenders are happy to lend to people with poor credit, but they charge very high interest on the loan.

Years ago, the risk of conducting business deals was understood on a personal basis. Whether it was a neighborhood or a village, everyone knew who was good at following through on promises and who was irresponsible or unstable. People new in town might need to present a letter of reference to secure a job or a place to live.

Even now, if a friend or acquaintance asks to borrow something — your car, for example — you would probably think about their driving habits before you answer. Has he had accidents? Is he generally careful with his possessions? Does he keep his word? In today’s complex marketplace, we no longer know the people we deal with personally. Instead, we rely on credit bureaus to track people’s history and turn it into a single number that represents how much they can be trusted in the financial realm.

There are three main credit reporting agencies, or credit bureaus: Transunion, Equifax and Experian. These agencies gather information each month about your financial behavior. Anyone to whom you pay bills (credit card, utility bills, mortgage payments, auto loan installments, medical bills) reports to one or two of the credit reporting agencies. In addition to information on whether you pay your bills on time, the agencies also check on how much of your available credit you have used and the age of each account. Finally, they add in information about whether you apply for credit frequently and whether those applications are approved.

Each credit bureau usually has a slightly different version of your credit report, since each may receive information from different creditors. Your credit score is created by FICO or another credit-scoring company, using information from the credit bureaus. A high credit score tells lenders that you’re a good risk, so they charge you less to borrow money.

The fee for borrowing money is interest. With good credit, you can save thousands of dollars on a home or auto loan and pay less interest on your credit card. Conversely, a person with poor credit may end up paying 25 percent more on an auto loan, making that $20,000 automobile cost $25,000 over five years.

Taking out loans isn’t the only use for credit, however. In many states, your auto and home insurance costs are tied directly to a credit score that’s generated especially for each industry sector. A person with excellent credit may be charged only half as much as someone with poor credit for the exact same auto insurance coverage. It’s also standard practice for landlords to run credit checks on prospective tenants, and having poor credit can make it difficult to find a place to live. Prospective employers even check your credit score sometimes to see how responsible you are.

Credit reports are highly important, but unfortunately they often include errors. Your report may include information from someone with a similar name or someone who lived at your address before you moved in. A paid-in-full account may still show as owing due to the creditor neglecting to report the fact that you paid. There are numerous causes for errors, and each one needs to be individually disputed with each credit reporting agency.

Because errors are common in credit reports, it’s important to stay aware of what your report contains. You are entitled to one free credit report per year from each credit bureau from this federal government site. Many financial advisers suggest ordering a credit report from one bureau every four months so you have a higher chance of catching errors soon after they occur.

If your credit is poor, the good news is that it’s repairable. There are two approaches to repairing credit. You may only need one of these steps, but many people need both. The first step to repairing credit is to examine your credit report, find any errors and engage in a dispute process with the credit bureaus until they remove the incorrect content. The second step is to budget your money so you can pay all your bills on time.

Learning as much as you can about how credit works is a great foundation for building excellent credit. Your power to move through the financial world is dependent on your ability to handle the all-important tool of credit.

Can I Repair My Credit After Bankruptcy?

By | Ask a Credit Expert, Bankruptcy, Consumer Rights, Credit Laws, Credit Repair, Personal Finance, Your Credit

Credit Repair After Bankruptcy

Bankruptcy sounds like a dirty word, but for many people, it is a lifeline to starting over. Whether you lost your job, were overwhelmed with an unavoidable expense or found yourself dealing with a costly illness, bankruptcy was designed to give people a chance to begin again. However, bankruptcy does take a serious toll on your credit score.

Understanding the Impact of Bankruptcy

Luckily, that’s not to say that your credit score is going to be ruined forever. According to the Federal Trade Commission, your bankruptcy can stay on your credit report for as long as 10 years after your debts are discharged, and that can make accessing new credit, buying a home or even getting a job difficult. While the impact can be severe, it is possible to repair your credit after bankruptcy. It just takes some proactive efforts on your part.

Look at it like this: Your credit score is meant to be indicative of how risky it is to let you owe money. High balances, late payments and anything else that could show you may be living outside your means is suspect. Filing for bankruptcy is largely the culmination of those issues. Now, you may have had extenuating circumstances that were completely outside of your control, or you may have merely gotten underwater and couldn’t find your way out. Whatever the case, the bankruptcy on your credit report is objective; it doesn’t matter why it happened. To repair your credit, you have to demonstrate that you are no longer a credit risk.

Starting Over After Bankruptcy

The first advice most people hear after filing for bankruptcy or facing some similar credit crushing issue is to establish new credit as soon as possible. That is good advice, but it is incomplete. Repairing your credit after bankruptcy will require that you have accounts on which you make regular payments. Getting a loan and then paying it off will not do nearly as much good for your credit report as making consistent payments.

“The key is to establish at least three positive trades actively reporting on each of your reports with Equifax, Transunion and Experian,” explains Marco Carbajo for the Small Business Administration. “For example, if you’re currently making timely payments on a car note but have no other positive credit that’s active, then you should obtain two secured credit cards and use them regularly.”

Understanding Your Credit Score

Aside from exercising your credit, you also want to practice good spending habits. According to the Federal Reserve Board, your credit score is influenced by whether you make your payments on time, the amount of debt you have, the number of accounts you have, the length of your credit history and how much you owe.

For instance, once you get your first credit cards after bankruptcy, you will want to make sure that you keep the amount of debt on those cards at less than 30 percent of the credit limit, and increase your credit limit whenever you can – the higher your credit limit, the more your creditors trust you and the better it looks on your credit reports. Also, make sure you are making your payments on or before the due date and paying any billable amounts in full.

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Being Selective About Your Credit

After bankruptcy, you want to be selective about where you find your credit as well. Many people with bad credit are sold solutions that promise to provide them access to new credit far more quickly than through any other source, but beware of those offerings. Even if the lender is legit, if the company is known as a “high-risk lender,” using them for your credit or banking needs could actually hurt your credit score. Instead, focus on well-known lenders and credit companies. Choosing a big bank over a high-risk lender, even if it means you have to start with a lower credit limit or a secured credit card over a traditional credit card, looks better and may even give you more options for growing your credit as you repair the damage from your bankruptcy.

Righting the Wrongs in Your Credit Report

You should also take a look at your credit reports to make sure that the debts from your bankruptcy were discharged properly and that all information is accurate. An error on your credit report can really work against you. To do correct inaccuracies, the Federal Trade Commission says that you will need to obtain a copy of your credit report from each of the credit reporting agencies and inform them in writing of any inaccuracies. You may need to provide proof of the inaccuracy if possible, and it may be necessary to tell your creditor that you are disputing the entry. Hiring a credit repair company can make the process easier. They handle the paperwork for you and handle the dispute on your behalf.

Once you begin to take steps to improve your credit score after bankruptcy, you can start to see modest improvements pretty quickly. As long as you are careful with your credit, choose the right lenders and maintain accurate credit reports, you can repair your credit after bankruptcy.


  • Federal Reserve Board, “5 Tips for Improving Your Credit Score”
  • Federal Trade Commission, “Coping with Debt”, November 2012.
  • Federal Trade Commission, “Free Credit Reports”, March 2013.
  • Small Business Association, “How to Restore Your Credit After Hard Times”, Marco Carbajo, May 2013.

Home Equity Loans and Your Credit

By | Credit Repair, Credit Reports, Credit Scores, Home Buying, Homeowner, Mortgage, Personal Finance, Uncategorized

Home equity loans, as the name suggests, are a way for homeowners to borrow against the equity that they built up in their home. For a number of years following the 2008 financial crisis, lenders were reluctant to offer home equity loans because the value of so many homes had decreased. This lowered the equity that people had built, so it was difficult for many Americans to take advantage of them.

The good news is that as the housing market has stabilized, fewer people are at risk of defaulting on their mortgage, and home values are on the rise. In fact, the home equity market has improved for its third straight year, and, according to USA Today, the number of loans increased by about 20 percent in 2015. Consequently, lenders are more willing to extend home equity loans to customers who qualify.

The key word is “qualify.”Owning a home and having some equity doesn’t mean you automatically qualify for a home equity loan. Lenders want to be sure that you’ll be able to repay your loan. Your credit score and credit history are key indicators. So lenders won’t just look at the amount of equity that you have in your home, they’ll review your credit score and your payment history on other lines of credit, such as credit cards and your existing mortgage.

Credit Scores

While a potential home equity borrower may be current on all of his loans, he may still have a credit score that is too low for him to qualify for a home equity loan. Enlisting the help of a credit repair service such as Ovation Credit Service is a great way to improve your credit score. Our services work with credit bureaus and creditors to resolve issues that may be hurting your credit score.

A key service of credit repair services is educating you about factors that are impacting your credit score and keeping it lower than it could be. Not everyone understands how things like credit utilization and the number of open lines of credit can affect credit scores. Having an expert on your side to help navigate your credit report can help improve your score and show you which behaviors are likely to have the greatest impact on your score.

Types of Home Equity Loans

There are a lot of home equity lenders. You can go to your local bank, where you already have a relationship, or shop online for the most competitive rates. There are two main types of home equity loans:

  • Traditional Home Equity Loans are a lump sum amount paid to you when you’re approved. These are best for repaying credit card debt, consolidating other loans, paying for your kids’ college tuition, or splurging on a big-ticket purchase such as a car. The funds are given to you, and you make payments based on how much you borrowed.
  • Home Equity Lines of Credit (HELOC) are a great way to borrow against the equity in your home and keep some funds in reserve. If you’re renovating a room in your house or want to take a nice vacation, you can tap into some of the equity available to you. You only pay back the amount of equity from the line that you used, but you have other funds available if you decide to expand the scope of your renovation project or extend your vacation.

Things to Consider

A traditional home equity loan is a great tool for borrowers who want to improve their credit score. Having some cash available to consolidate high-interest credit cards—or pay them off entirely—is a good way to manage your credit. A credit repair service can recommend which lines of credit you should pay off first to have the greatest impact on improving your credit score.

Pay Off Debts – 9 Affects on Your Credit Score

By | Ask a Credit Expert, Bankruptcy, Consumer Rights, Credit Laws, Credit Repair, Credit Reports, Credit Scores

Credit Repair - Pay Debts

Are you wondering how paying off your debt could affect your credit score? There’s no doubt that paying all of your debts is the ideal thing to do, but sometimes it just isn’t possible. If you’ve lost your job or suffered other hardships, you may have to choose which bills to pay. Here’s how each course of action will affect your credit score.

1. Paying in Full

You may be unable to pay in full now, but it’s worth considering in case you win the lottery, find a higher paying job or have some other windfall. When you start paying on time again, you’ll have positive payment history added to your credit report.

Unfortunately, any past late payments or other negative remarks will not be removed from your credit report when you bring the account current. They may affect your credit score for up to seven years from when they happened.

2. Paying Only the Minimum Payment

Paying the minimum payment due by the due date keeps your accounts current and avoids late payment penalties. Even when money is tight, make paying the minimum payment on every account your first priority.

When possible, you should pay more than the minimum. In addition to saving interest, you’ll also be improving your credit profile.

Paying only the minimum payment can lead to your credit card utilization ratio increasing, which will lower your credit score. Credit card companies also have internal models that flag accounts with only minimum payments as high risk, and they may reduce your credit limit or close your account.

3. Paying Late

Paying late should never be an option. Even if you’re trying to pay off a higher interest credit card first, don’t skip paying the minimum payment on your lower interest cards.

If you absolutely can’t make every minimum payment, you should understand the two payment deadlines. The first is the actual due date that must be met to avoid a late fee, while the second is for credit scoring purposes. Late payments aren’t reported to the credit bureau as long as you make the payment within 30 days of the due date.

4. Ignoring Your Bills

If you can’t make your minimum payments and have already had a late payment reported on your credit report, don’t just ignore the bill. It will only get worse.

Unpaid debts will be reported as charged off or result in a lawsuit and judgment against you. These have a much bigger negative impact on your credit report than late payments.

If you’re sued, you’re also at risk of having your wages or bank accounts garnished and losing even more control over your finances.

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5. Using the Debt Snowball Method

The debt snowball method is a strategy you can use once you stabilize your finances and are able to make more than the minimum payment on your credit cards. With the snowball approach, you focus on paying off one credit card at a time — either the lowest balance or the highest interest rate.

The downside to the snowball method is that your credit score may not rise as quickly as it could. It’s typically better to have moderate balances on all of your cards than to have one or two with no balance and the rest almost maxed out.

The credit card companies that you’re only paying minimum payments to may also get nervous, as explained above.

6. Taking Out a Loan to Pay Off Credit Cards

Taking out a loan to pay off credit card debt may or may not be advantageous. The biggest positive impact it will have is to bring up your credit score by reducing your credit card utilization ratio.

However, a loan will often have higher monthly payments than your credit card minimum payments. This puts you at greater risk of making late payments unless you’re absolutely sure you can meet the new payment amount.

Of course, you’ll also need to compare the interest rate of the loan to your credit card rates to see if it’s worth it. This is more likely to be the case if previous late credit card payments have pushed you up to the penalty APR.

7. Offering a Settlement

If lenders believe there is a risk they won’t be paid in full, they’re often willing to accept a lump-sum settlement or a modified payment plan. Legally, you won’t owe them any remaining balance, but your account won’t be reported as in good standing on your credit report.

Your credit report will also reflect that you settled the account for less than what you owed. As with other options, past negative history is not deleted.

8. Paying for Deletion

Paying for deletion is a type of settlement where you ask the creditor to remove negative items from your credit report in exchange for your payment. You may also be able to ask that the account be marked as paid in full rather than settled or charged off.

Technically, the credit bureaus don’t allow this practice, but many creditors bend the rules if it helps them get paid. If you’re successful, the negative items will be removed from your credit report, and your score will be the same as it would have been if they were never added.

9. Declaring Bankruptcy

A bankruptcy in itself has one of the largest negative impacts on your credit score, and it also doesn’t erase negative history. However, bankruptcy will stop collections and prevent new negative marks from being added to your credit report.

If you can’t keep up with your payments, bankruptcy may be the best option to stop the damage and allow you to focus on rebuilding your credit score.


  • Review: Customized Assistance & Credit Education Empowers Consumers to Get Their Finances Back on Track

By | Ask a Credit Expert, Credit Repair, Credit Reports, Credit Scores, Your Credit just released a review of our premier credit repair services.

In a Nutshell: Ovation is a credit repair company with more than a decade of experience helping clients get over their credit woes. With one-on-one customer service and additional features like fast track same-day service, identity optimization, and letters of recommendation, this agency is a trustworthy means of fixing credit report errors. Committed to customized service for every client, Ovation empowers, educates, and assists people on their way to a better credit standing.

Read the whole review here:

6 Ways to Keep Your Job Search Away From Your Credit Score

By | Credit Repair, Credit Scores

“Job hunting is cheap and easy,” said no one, ever.

There are many resources to consider as you search for the perfect job; however, some of these resources may cost a pretty penny. Applying for another line of credit to pay for these expenses, however, is not the answer, since that course of action may affect your credit score.

To avoid fluctuation of your credit score or a need for credit repair down the road, here are six ways you can search for a new job with minimal costs:

1: Be your own headhunter

The Internet provides many resources that can help you find a job. You can browse through employment websites and download job-hunting apps to your smartphone.

Most of these employment services are free; however, if you are looking for a high-level position, you may want to consider a headhunter. Do your research first so you get results for the money you are spending.

2: Consider a career coach

Career coaches can help you determine your career goals, and they can help you establish your career path. Their services do involve a fee, though, so research your options and find someone credible. You may even consider bartering your services for free career advice.

3: Look good, spend less

Always be sure you look professional at an interview. That said, putting together the right outfit doesn’t need to cost a fortune. Hiring managers will be much more concerned with your experience and personality than your designer suit or shoes. If you really want to buy a new outfit, however, consider shopping at a local second-hand store for business attire.

4: Keep those receipts

Keep track of all your finances while you are searching for a new job. Expenses such as resume preparation costs and headhunter or career coach fees may be tax deductible. These costs are deductible as long as you are searching for a job within your current occupation.            Remember, too, that only the total amount exceeding 2% of your adjusted gross income can be deducted.

5: Use your community resources

Take advantage of the career resources in your community while you are searching for a new job. Employment centers and public libraries may offer workshops for job hunters as well as classes to brush up on computing skills. Additional resources may include clinics for helping with interviews and resume writing.

6: Network online and offline

Networking is one of the best ways to find work. It’s important to introduce yourself and get your name out there. You can find local networking events by visiting the Meetup website or by joining a professional association in your field.

LinkedIn is also a powerful online networking tool. Be sure to use a professional photo (no selfies!) and proofread your profile for accuracy. Moreover, write a summary to tell your profile viewers who you are and what your goals are. You never know who could be looking at you.

The best job resource

It’s you! Sure, searching for a new job can be time-consuming, and the fast and easy way may be to pay someone else to do the work for you. But this is not a solution for everyone, and you shouldn’t risk your credit score to find the best headhunter. There are many free and low-cost resources that can help you find a job just as well.

On the other hand, if you ever need assistance with credit repair, consulting with professionals could do you a world of good. Consider calling the credit experts at Ovation Credit if you think you’re in need of some help. We’ll be happy to set you up with a free consultation to discuss your financial situation.

Don’t Let Unexpected Expenses Derail Your Retirement

By | Credit Repair, Credit Scores

unexpected-retirement-expensesCongratulations—retirement is in sight. You’ve put in the hours, banked your savings, monitored your credit report, and protected your credit score. Now you’re ready to enjoy the reward you’ve been working toward all your life. Picture it: no more lunches and parking to pay for. Sweatshirts and jeans instead of expensive suits or dresses. No more money taken out of your paycheck for Social Security, Medicare, and your 401k. You’ll really enjoy the good life when you have fewer expenses.

But will you? Before your last day on the job, make sure you’ve accounted for the possibility of unexpected expenses after you retire.

Rising Travel Expenses

Although certain expenses may go down at retirement, others can easily go up. Travel is a good example. You finally have time to see the world, so you’ll spend more money doing it. Take advantage of senior discounts from airlines and hotels, and travel during non-peak times during the day or week; you’ll save money.

Spending More on Health Care

Health care costs may rise after retirement, too. You’ll probably find that Medicare doesn’t cover everything your employer’s health plan did, so be sure to account for those extra expenses in your retirement planning. You can also bundle health care expenses to get a tax break; ask your tax professional how best to do it.

Taxes after Retirement

On the subject of taxes, retirement is when you start taking out money you’ve been putting into IRAs and 401ks for all those years. If your plan requires you to take a distribution, you might actually see your income, and your tax bill, rise. Don’t get a nasty surprise—consult your tax professional before you start taking money out of your retirement plans.

Retirement is a time for doing what you’ve always wanted to do; you’ve earned the right. Buy what you want, go where you want, live your dreams, etc. But remember, increasing life expectancies mean that your retirement years might last a quarter-century or more. Make a plan now to ensure that your savings are as long-lived as you are. Part of that plan should involve making sure your credit report is as clean as your old desk on your last day in the office. If your credit score isn’t what you’d like it to be, a credit repair service such as Ovation can help. Give us a call today to talk with one of our knowledgeable representatives.

Help Build Your College Student’s Credit Score with a Credit Card

By | Credit Cards, Credit Repair, Credit Scores

college-credit-cardsWhat are college students getting out of their education? Preparation for a career, lessons in responsibility, and friendships that last a lifetime, sure. But here’s something else they can start working on in school: a solid credit history and a good credit score.

Now, we know what you’re thinking: “College kids and credit cards are a dangerous mix. No way I’m getting him one.” That’s your option, of course, but if you take it, you might be denying your student an important opportunity to build good credit.

What Does a College Student Need with a Credit Card?

If you went to college as recently as 15 years ago, you probably paid cash for most of your day-to-day purchases, like school supplies or coffee on the way to class. Today, however, we’re a swipe-and-go society, so a credit card provides your student the kind of convenience we’re all used to. It’s also safer to carry a credit card than it is to carry a bundle of cash. When your student is out at night with friends and it’s time to settle the tab, for instance, he or she won’t have to take a potentially dangerous walk to the ATM.

Credit Card or Debit Card?

Some parents think a debit card is a good alternative: “At least they’re drawing from an account with cash in it instead of borrowing money every month.” True, but think about this: using debit cards instead of cash comes with the risk of fraud or identity theft. Plus, debit cards don’t offer the same level of fraud protection that credit cards do (which is why people should never make online purchases with a debit card). If someone gets hold of your student’s debit card, they can drain the account of every dollar. With a credit card, your student’s potential losses are limited if the card (or their identity) is ever stolen.

Who Shouldn’t Get a Credit Card?

A credit card is a good idea only if your college student is able to pay the bill on time and in full every month. If your child isn’t wired that way, he or she may not be a good candidate for a card. Similarly, if your student is impulsive with money or a big spender, a credit card may not be a good option. But for those mature enough to handle one, a credit card can be a useful tool for building their credit history.

Making regular credit card payments proves that your student is a responsible borrower. Four years of that kind of responsibility will get them into the working world with a good credit score—and that’s important.

A misstep or a bad stretch with credit doesn’t have to be a disaster. If you or somebody you love has trouble with their credit score, a credit repair service such as Ovation can help. Contact us today and we will set you up with a free consultation to discuss your options.

7 Simple Ways to Protect Yourself from Credit Card Fraud

By | Credit Cards, Credit Repair, Credit Scores

credit-card-fraud-protectionHistorically, 13 is considered an unlucky number. Add a few zeroes behind it, and you’re closer to the more than 13 million Americans who easily fall prey to identity theft each year. Why is it so easy? As consumers, we make it easy for identity thieves to access our records by frivolously throwing around our information as if it were as unimportant as a piece of blank paper. Let’s look at how to prevent becoming part of the unfortunate 13 million.

Protect your credit card numbers

Your numbers are the gateway between you and fraudulent activity. When reciting credit card numbers over the phone, take care to only provide them if you initiated the call. If someone calls and asks for credit card numbers, ask for their name and extension, then disconnect. You can call the primary phone number for the business and ask to be routed to that person.

Take care with your actual card, as well. Be sure to tuck it away in your wallet or purse after making an in-person purchase. Call the bank or credit card company immediately if you find you have left the card behind.

Don’t store your online passwords

Between work and home, we typically have a large number of user names and passwords. Every site has a “Remember Me” feature, and some browsers offer to remember passwords, too. This makes it easy for identity thieves to slip in and steal pieces of information. Avoid saving passwords; that applies to every website, from banking and email sites to those of your social media and favorite shopping destinations.

Opt in for text alerts

Many banks and credit card companies now offer text alerts as an option for their clients. You can opt in to receive an alert when a purchase is made with your card. In this manner, you are aware when there is activity on your card and can be well informed of fraudulent activity.

Check your credit card statement carefully

Review your statement every month. Even if you paid online, thoroughly review your statement to be sure you haven’t missed any fees or unaccounted-for purchases.

Check your address

Verify your address with your credit card company and bank from time to time. It is a common scam for thieves to change your address and have your bills sent elsewhere. A brief amount of time could save you a big headache.

Shred your documents

It’s amazing what thieves can use to steal your information. Anything with your financial information is candy for an identity thief. It’s imperative that you even shred pre-approved credit card applications, since even those bear enough information for someone to open an account in your name.

File reports immediately

Immediately contact your credit card company as soon as you see something suspicious on your statement. The longer you delay, the more difficult it is to resolve irregularities and the greater the opportunity you allow thieves to engage in fraudulent activity.

Protecting yourself from identity theft requires just a little bit of upfront effort on your part. Cleaning up the aftermath, however, is another story. If you find yourself a victim of identity theft, remember that consulting a credit repair specialist such as Ovation can be a prudent option for maintaining your credit score. The road to recovery can be long, but restoring your credit can certainly be achieved. Whether you’re recovering or protecting yourself, start today.

Help Your Credit Score: Watch for Reinserted Items on Your Credit Report

By | Credit Repair, Credit Reports, Credit Scores

credit-report-reinserted-itemsIf you monitor your credit report regularly to keep your credit score healthy, every now and then you may see certain charges or debts you want to dispute. When that happens, you can contact the credit bureau, make your case, and get the item taken off. It’s a great feeling when you’re done—but what if the item comes back? Sometimes removed items are reinserted into your report. And that’s a helpless feeling: “Hey, I thought we fixed that!” “How can they do that to me?” “Is that even legal?” We’re here to answer those questions for you.

When Are Items Reinserted on Your Credit Report?

Sometimes credit bureaus or the organizations that furnish information to them, such as banks and collection agencies, get things wrong. If a mistaken item appears and the lender or collection agency confirms that it’s not your debt, the credit bureau will remove it.

But the process of determining whether the item will be removed isn’t exactly a swift one. From the time you make your complaint, the bureau has 30 days (and in some cases, more) to investigate. As a result, you may get additional requests for payment during that time.

If the bureau can’t verify whether the item is legitimate within that time, it has to take it off of your report. But if it’s able to eventually verify the legitimacy of the item after that, it can put the item back on your report and notify you within five business days. In other words, no news is good news. If you don’t hear that the item is being reinserted, it’s not going back on your report.

Reinserting Certain Items on Your Credit Report Is Against the Law

When an item goes to collection, it can stay on your credit report for up to seven years. (Bankruptcies, liens, and unpaid student loans can appear for longer periods.) Once an item hits that seven-year mark, it comes off. If such an older item then reappears on your credit report, that action is called “re-aging,” and it’s illegal. Lenders, collection agencies, and credit bureaus are forbidden by law to put items back on after their seven years are up.

For the Sake of Your Credit Score, Sometimes You Just Gotta Pay the Bill

Continuous disputes with credit bureaus and collection agencies can be exhausting. If you legitimately owe a debt, it’s better to pay it (or part of it—collection agencies will often settle for a portion of the full debt) than to leave it on your report to damage your credit score.

And if you feel like you need credit repair, consult a credit-repair service such as Ovation. We can give you advice and assistance that boosts your credit score and makes a real difference in your life every day. Contact us today for a free consultation.

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