Many factors can reflect poorly on your credit trustworthiness, including at least one that is not your fault: identity theft. Identity thieves can open new accounts in your name, accrue significant debt, and, of course, fail to pay back these debts. Since it can be difficult to fix your credit score by yourself, it is advisable to seek counsel from a credit lawyer in Fairfax if you have been the victim of identity theft. A credit lawyer at a consumer credit law firm can advise you and help you restore your credit history.
Aside from identity theft, there are four main things that can adversely affect your credit score. You can hear about them by watching this video, which features a personal finance reporter. She explains the two most significant problems for a person’s credit score and debunks a common myth regarding closing your credit card accounts.
Your credit is critical for your personal financial health, yet many people still believe common misconceptions about credit scores and credit reporting. Unless you have recently visited a consumer credit law firm in Fairfax to discuss identity theft or inaccurate credit reporting with a credit lawyer, then it may be time to learn a little more about credit reporting.
Myths About Credit Inquiries
It is commonly thought that any type of credit inquiry will adversely affect a person’s credit score. In fact, there is no impact on a person’s credit history when he or she checks his or her own credit. This is a type of “soft inquiry.” A credit report lawyer at a consumer credit law firm is likely to recommend that you check your credit reports frequently for signs of identity theft and erroneous information, since these two issues can indeed have a negative impact on your credit. On the other hand, when you apply for a loan or other line of credit, this is known as a “hard inquiry” and it can affect your credit score. The effect can be negligible. You can shop around for similar type loans by applying for credit multiple times within a period of a few weeks for the same types of credit. However, many different applications for many different types of credit may adversely affect your credit score. Some scoring models recognize these as similar applications (like a car loan) and treat them as one inquiry, but others may not.
Myths About Delinquent Accounts
Another common myth about credit reporting is that negative information is automatically removed from a person’s credit history once that account has been paid in full. In fact, paying off a delinquent account should mean that the account will be listed as “paid.” However, it will remain on the credit history for a set period of time. Collections accounts, for instance, typically remain on a person’s credit history for seven years. If you have paid or settled a collection item, you will have an inaccurate credit report if the account is not actually marked as paid or settled on your credit report. If you do not pay the account in full and the creditor agrees to settle the debt for a lesser amount that will negatively affect your credit score as well.
Myths About Closing Accounts
If you have old credit cards and similar accounts, you might think that closing those accounts would help boost your credit score. Actually, doing this could very well reduce your credit score significantly. This is because one factor that goes into calculating your credit score is the amount of debt you carry relative to your available credit. In other words, if you have two credit cards, each with a $3,000 limit and you close one of them, you will reduce your available credit limit by $3,000 or 50 percent, which could affect your credit utilization ratio.
You may already know that your credit score fluctuates based on various types of financial information. If you have different types of credit accounts, make payments on time and in full, and otherwise manage your credit responsibly, then you are likely to have a good credit score. Certain public records, credit card debt, unpaid accounts, and similar financial issues can lower your credit score. Unfortunately, adverse actions taken against you will remain on your credit reports for a set period of time. However, this does not mean that you do not have any means of improving your credit score. Credit reporting rights for residents of Fairfax include the right to contact a credit lawyer to file a credit report dispute. Advise your credit lawyer if you identify erroneous information on your reports.
If you owe federal or state taxes, these debts will not appear on your credit report and will not affect your credit score. By deciding to pay off these debts-such as with an installment payment plan-you can avoid further problems. However, if you do not make arrangements to pay the taxes you owe, the IRS may issue a tax lien against you. Tax liens are a matter of public record and they will appear on credit reports. Some credit reporting agencies will remove unpaid tax liens from your credit report after 15 years from the filing date. Even if you pay the debt and the tax lien is released, it will remain in your records for seven years.
If your credit reports wrongfully reflect a civil judgment, it is time to visit a law firm specializing in inaccurate credit reports in Fairfax. Civil judgments include judgments from small claims court. For example, if you have unpaid rent and your landlord sues you, the court may issue a judgment against you for the amount you owe. A civil judgment will remain on your credit reports for seven years from the date of entry. You cannot remove it sooner by paying it off sooner unless of course, the information is inaccurate, and you dispute it successfully.
Bankruptcy will significantly affect credit scores. Although you can begin restoring your credit score after your bankruptcy discharge, it will remain on your credit history for years. Bankruptcy information is removed 10 years from the date of entry of the order of relief.
Identity theft occurs when someone gains access to your Social Security number and uses that information to pretend they are you. Identity thieves may open new credit cards, obtain loans, and even get a driver’s license—all in your name. If you are worried about identity theft, contact an identity theft lawyer in Ashburn and watch the following video clip.
Many consumers do not realize that their identity has been stolen and take action by contacting an identity theft attorney until months after the fact. During that time, an identity thief can inflict untold damage, racking up thousands of dollars in debt or even earning a criminal record. This can destroy a person’s credit, leading to the need for credit disputes, and affect the victim’s personal and professional lives. Today, many services help consumers proactively protect themselves against this type of fraud. If your identity is stolen, an experienced consumer protection law firm can help indemnify you, restoring your reputation and good credit.
Employers routinely obtain consumer reports from third-party agencies to conduct background checks on current or prospective employees. If these reports reveal negative information about an employee, the employer can use this as a basis for termination or denial of an employment position. For this reason, it’s important to properly handle a credit dispute near Leesburg .
Under the Fair Credit Reporting Act, any employee or potential employee has the right to dispute information contained in his or her credit report. This video discusses the steps for disputing false information contained in a credit report. As is explained, a consumer must send a letter identifying why certain information is inaccurate as part of the dispute of the inaccurate credit information. The consumer could also contact a credit lawyer to ensure the credit agencies investigate the complaint within 30 days, as required by consumer law. Blankingship & Christiano is happy to review any letter that a consumer has sent to or received from a credit-reporting agency. Please contact us for a review.