Credit Repair Advice for Students
Credit repair is fast becoming an important issue in Columbia, Missouri where the average consumer credit score is 3% below the national average. College towns, like Columbia, are some of the areas hardest hit by low credit ratings, owing to the fact that student loans are a major driving factor of low or bad credit ratings. It has become the second highest consumer debt category, eclipsed only by mortgage debt, and outpacing even credit card debt and auto loans.
It is especially important for newly graduated students to achieve and maintain a respectable credit rating because a low credit score can impact your ability to find a job, and thus affect your ability to pay your student loans. It can devolve into a vicious cycle if you are not careful. If you have found yourself caught in just such a cycle, fear not! It can be broken with just a little self-discipline, planning, and a little professional help. Here are some tips to help you repair your credit score so you can begin your new life without the millstone of bad credit hanging around your neck.
- First things first. You need to find out exactly where your credit stands. You can get a free copy of your credit report from any of the three major credit reporting bureaus (Equifax, Experian, and Transunion) once per year. The once per year limit is for each company, so you can get a total of three reports per year if you stagger your requests across the three companies. Avoid using other web sites which claim to offer free reports- According to the FTC these companies are often deceptive or outright fraudulent.
- Once you have your credit report, make a photocopy and scan it for any errors and highlight any errors that you may find. Pay special attention to your identity information such as Social Security Number, name, and address. Also, verify the lists of your major purchases, credit cards held, and debts outstanding. Be sure to have evidence, such as bank statements, that prove that the highlighted items are erroneous. If you don’t have proof of the errors legitimacy, there is nothing the credit reporting bureaus will be able to do for you. Once you have collected all the pertinent information, write a letter to the bureau whose report contains the error. Many bureaus now allow online dispute of credit reporting errors, but it is best to send a physical letter via certified mail and to retain a copy of this letter for yourself. You can find advice on how to contact the bureaus from the FTC at: https://www.consumer.ftc.gov/
- Avoid further hits to your credit rating by paying all bills on time and avoiding applications for new credit cards, no matter how tempting the offer may be. Every application for a new credit card is considered to be a “Hard Inquiry” and is listed on your credit report. Too many “Hard Inquiries” over a period of two years can have a negative impact on your credit score- This is especially true if you already have a low rating.
If all of this seems too daunting, as it does to many, you may need to seek professional credit repair help. Also, these are just basic first steps you can take to staunch the bleeding. If and when you decide to seek professional help, be sure you are working with a reputable company. You may also consider availing yourself of a non-profit credit counseling agency who can help you manage your debt. Although credit repair can seem quite intimidating, it is not insurmountable if you are savvy and know when to seek help. Hopefully you have found this advice useful, and good luck going forward!