As important as a credit score is to consumers in order to qualify for a loan, up to 30% of the American population are not aware of their credit score. For many, this information only becomes useful when they wish to apply for a loan. It may also come as a shock if the financial institution picks up any derogatory information on the credit report. Consumers who have experienced payment issues before, may not be aware that these items are causing their scores to drop. These are some of the sneaky culprits on a credit report.
The Internal Bank Score
This may not show up on all credit reports but does show up on internal reports generated by ChexSystems, TeleCheck, and Early Warning Services. These services track the conduct of checking accounts such as returned items, unauthorized excesses, and even fraud. This could cause problems for consumers who wish to apply for checking accounts and loans, even if they have a clear credit report in other respects. Those who have bad info on their checking accounts should consider keeping the account clear for at least six months before applying for finance again.
Charge-offs are the debts consumers may have forgotten about but still seem to creep up and catch them later on. A charge-off is a loan that went bad with an institution and they’ve subsequently removed it from their books. The problem doesn’t go away from the credit report that soon though. Charge-offs take around seven years to clear off a credit report. There are ways to remove charge-offs that will allow customers to increase their credit scores substantially. One option is to hire a credit repair company to do the intricate work for you, or if you don’t mind doing some extra homework, you can file a credit dispute on your own.
Insurances, Cellular Contracts, and Medical Debt
These are items that few people are aware of that just seem to lurk on credit reports. Insurances and cellular contracts may not be debt, but companies are starting to list the payments on the credit bureaus. It’s important to manage these payments in order to keep the credit bureau clear. Medical bills are also not considered debt until they’re no longer in a current status. Blood work, emergency visits, and other items that may not have been settled by medical insurance may affect the credit rating of customers. Thankfully, new legislation keeps some medical debt off the bureau, but not all. Keep track of all appointments, invoices, and payments to ensure they’re up to date.
It takes time and a hard work to clear up credit reports and sometimes a lot of money. Keeping track of the paperwork is vital to ensure these items are cleared off credit bureau records. It is also important to manage payments effectively and keeping track of every dollar. A detailed budget and expenditure plan certainly helps with this.