By Professor Anthony Rivieccio
Normally when I have Clients that want to discuss ” their credit score”, I first let them know that there are many ” credit agencies” and each one scores you differently.
But of course the same still applies: Your credit score will be good or bad- depending on the interpretation of the people & institutions giving you the credit. Of course you want your score to be higher.
How do we do that?
In simple terms, get a copy of your credit report and clean it up!.
But it gets much deeper !
I tell my Clients, there is a ” 3 step” approach to clean up your report.
1- Whatever is true is true is true
You can not clean up something, that is true. If one, for example, defaulted on a prior credit arrangement, then you cannot wave a magic wand and, poof, it is gone! It is true and will stay on your credit report.
However, note that depending on the type of credit, there are some “statue of limitations” where you can have it eliminated but your looking at least 10 years.
2- Whatever is false is false is false
You would be amazed what could be on your report- that may not be yours. I run into this problem all the time. It could be a ” similar address”? It could be a similar ” last name”?.
It could be a similar “social security number”?. This is probably the predominant reason why one should look at their report annually . If it is ” false”, all you have to do is ask the credit agency company to take it off. More on that below.
3- Whatever is outdated- must be updated: This, believe it or not, is the most common area that takes your credit score, down. I give my Clients, the ” holiday example”. Let’s say in December, you decide to buy a lot of presents.
You charge your credit card. During the month you get your billing, asking for the minimum amount, let’s say $50. Because it’s the holidays though, you need all your free cash available and decide not to pay the December payment. You figure you will catch up in January.
So in December, you do not make the payment and the credit company puts ” no payment” in your December records.
Now January comes and you get your bill, $50 for December & $ 50 for January. You paid it. Congratulations to yourself, you think your caught up on your billing. Well that’s true but not on your credit file.
On your file, it shows you made a $100 payment in January, but you were still ” deliquent” in December. Should the credit company change that? Years ago, I thought they should also, before I learned the hard truth: it is NOT there responsibility to make the change automatically- it is OUR responsibility to contact the agency and tell them to make the correction.
So in the areas of 2 &3, these areas keep your score down. So how do you clean them up?
Fixing your credit report:
Under the Fair Credit Reporting Act of 1974, we have the power to correct our credit report – all you have to do is ask.
Get a copy of your report and see which areas fall in numbers 2 & 3, and just simply write a letter to the credit agency saying, “Under the fair credit reporting act of 1974, I am requesting that my credit file be updated. The following items underneath are ( either False or NOT deliquent).” Then just list those items.
Under the law the agency has up to 30 days to research and see if you are correct with your presumptions. If you are, in 30 days, your credit report will be updated. As those things come off your report, your credit score indirectly starts to go up.
As I have worked with several Clients’ over the last 3 decades, it feels great to watch their score go up . In theory, it was their life value- stronger.
Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info, The Parkchester Times and The Bronx Chronicle.
Mr. Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University.