Credit Tips

Best Times to Dispute Bad Credit

If you have a lot of problems on your credit report, it may seem like too much trouble to dispute bad credit and negative listings that you know will gradually be removed over time. However, disputing those negative items can make them go away much more quickly, and there are many instances when you need to dispute bad credit sooner rather than later if you don’t want to miss important opportunities.

When you need new credit or additional credit from the same creditor, you want your credit report to be as clean as you can possibly get it. And while it might not be an issue now, if you want to get a new home, insurance, better credit rates or even a new job, clearing up credit problems is essential. To do that, you have to dispute bad credit.

Dispute Bad Credit before Buying Your New Home

When you want to buy a house, home loan experts are going to look at how much outstanding credit you already have and how you have paid in the past. A steady job and living in one area for more than three years is good, but a clean credit record will help you get a nicer home and possibly lower payments or a lower down payment or both.

This is why you want to dispute bad credit now — so your credit record will be clean and you can convince the lenders that you’re not trying to buy a home that you cannot afford.

Dispute Bad Credit before Looking for a New Job

Current and future employers are now allowed by federal law to base their hiring and promoting on information they get from your credit report. Any negative reports will reflect badly on your ability to perform or your trustworthiness to their company.

If you are trying to get a job that requires a security clearance or significant money handling, they will scrutinize your credit report very closely, and problems could put you out of the running before they even look at your other qualifications.

If you fail to dispute bad credit before you start the hiring process, you’re cheating yourself of the best possible job for which you could be considered. This is especially true when you have incorrectly listed items that you know are damaging your credit record, because these items can often be removed.

Federal law requires that you be given a copy of your credit file and a written description of your rights regarding your credit if a company declines to hire you based on the information in your credit report. However, this only applies to the credit report used to make the decision — you can’t get a copy of your Experian credit report if the company used Equifax to make its decision.

You should also be aware that any application for employment that you fill out these days will likely require you to agree to have your credit pulled. This means that employers are allowed to get a deeper look into your finances than you may realize.

Dispute Bad Credit before Shopping for New Insurance

Dispute those negative items before you get your next quote for new insurance — the Insurance Information Institute reports 40% more claims are filed by drivers with bad credit. What does that mean for you? If you have unresolved bad credit issues, you’re going to be paying more for insurance, because you look like a bad risk — even if you have a clean driving record.

If your credit score is low and full of undisputed negative reports, your business insurance rates and home insurance rates could be affected as well. Insurers look at your history of payment, how many credit cards you have, and how far your credit goes back. If they don’t like what they find, you’ll definitely be paying more. And unlike your potential employers, they do not have to explicitly tell you when they peek at your file, although your agreement to having your credit pulled is likely there in writing when you ask for a quote.

Dispute Bad Credit before Opening a New Credit Account

The bottom line with any credit account — loan, credit card, line of credit, etc. — is that your ability to pay is only going to go so far in terms of getting you approved. Unpaid items, even when they are several years old, can cause you to be disapproved.

Therefore, any chance you have to successfully dispute bad credit on your report should be taken. Successfully disputing bad credit will raise your score for each item you get removed, and that makes you much more attractive to lenders.

When is the very best time to dispute bad credit?

You don’t have to wait for one of these scenarios to dispute bad credit. You should do so as soon as you see something in your credit file that you know is an error. Don’t wait until you’re applying to get a new home, a new job, or new insurance.

Don’t try to get your credit cleaned up “at the last minute”. That’s like letting the housekeeping go until your landlord is coming to inspect the home, or waiting until the week before summer to lose 30 pounds — even if you can manage it, the results will likely be less than ideal. Keep your credit report under your control and clean of errors, dispute bad credit whenever there are errors, and you will be well on your way to the financial freedom you deserve.

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