You want to improve your credit score. Which score? And how do you avoid being scammed in the process?
Your credit report matters when you finance a home, vehicle or other major purchase. It can affect your ability to rent an apartment, get a job in some places, or even qualify for a cell phone plan. The credit scores generated from reports are complicated, leaving a lot of room for confusion and scammers on how the figures can be improved.
Let’s start with the basics, which can be bewildering. There are three major credit bureaus: Equifax, Experian and TransUnion. Then, there are other guys such as Credit Karma, Credit Sesame and WalletHub.
They have two sets of credit scores, each with an acronym, FICO and VS. The former is better known. The latter’s full name is VantageScore. They now use roughly the same numerical scale of 300 to 850. If your number is below 700, it’s worth exploring ways to improve it.
Confused yet? So are many people about their credit “real score” and their “fake score.” There is no such thing as a fake score, just varying ways of measuring your creditworthiness.
Enter the scammers that promise to improve your credit score. Scammers, which call themselves credit repair companies, use a mix of underhanded and illegal tactics as they make false promises about quickly raising your score and demand for upfront payment, as Bankrate.com describes in a detailed webpage. Among the telltale signs:
- Pressure sales tactics
- No traceable address or phone number
- Filings of false claims
- Challenges to negative but accurate information
- No contract
- No explanation of your rights
- Payment in gift cards or cryptocurrency
Legitimate companies will search for report errors and file disputes, something you can do yourself. It’s worth your time. Consumer Reports and the nonprofit WorkMoney found in a consumer survey this year that 44% of participants found at least one error in their reports. One-third found mistakes in their personal information.
The Consumer Financial Protection Bureau, a U.S. government entity, offers these four recommendations:
- Stay well below your credit limit on credit cards. The closer you are to the ceiling, the more likely your credit score will decrease.
- Build credit long-term histories. Lenders like longevity.
- Apply for credit only when you need it. The more accounts you have open, the lower your score.
- Check your credit report – all three major bureaus – for mistakes.
Order a free copy of your credit report at AnnualCreditReport.com and check it for mistakes. Follow these directions from the bureau on how to dispute an error. Not satisfied with the credit agency’s response? File a complaint with the bureau at this webpage. You can also get a Credit Score Check-Up on Tropicalfcu.com by clicking below.
