Bad Credit Report Repair

Summary: If you've recently obtained copies of your credit reports and feel you may be in need of bad credit report repair ... this informative article is for you!

Hi Folks. Captain Credit here. Today I'm going to talk to you about the concept of bad credit report repair and what it means to home buyers in particular.

Did you know that credit repair is one of the most popular topics within the realm of consumer finance? It's true. I frequently review Internet search data to see what topics people are researching online and the phrase bad credit report repair comes up a lot.

What does this mean? It means that a lot of Americans -- and I mean a lot -- feel that they have bad credit and are looking for ways to repair it.

In many cases, these people are about to enter the home buying process, which means they'll be applying for a mortgage loan as well. And this is the particular audience I'm speaking to ... people reviewing their credit reports in advance of buying a home.

Let's start with some clarification of the terminology being used here.

Credit Repair Versus Correction

The first thing I'd like to clarify is the difference between repairing a bad credit score and correcting an erroneous credit report. And in doing so, we will be clarifying something else as well -- your credit report and score are two different things. And in fact, you have three of each, because there are three credit-reporting companies (Equifax, Experian and TransUnion).

So the first thing to understand is that your credit reports are different from your credit score. It's important to understand this distinction because it has a lot to do with the difference between credit "repair" versus "correction."

I have given this article the title of "Bad Credit Report Repair" because that's an exact phrase I see people searching frequently online, through Google, Yahoo, etc. But in a certain sense, the phrase is misleading. Generally speaking, you would correct a credit report and repair a bad credit score. Let me clarify further:

• If you request copies of your free credit reports from all three reporting agencies, and you find an error on one of those reports, then you will need to "correct" the erroneous data.
• If you order your credit score through a website like MyFICO.com only to find out that your score is low, you will want to "repair" or improve your credit score.

I know these are nitpicky semantic details, but I feel it will eliminate a lot of confusion to keep these things straight.

So let's talk about each of these things in more detail:

Correcting a Credit Report

If you request copies of your reports from TransUnion, Experian and Equifax and find that one or more of the reports contains errors, you will need to correct those errors as soon as possible. To do this, you will want to submit a dispute with the company that produced the erroneous report. It's important to do this as soon as possible, because the process takes time. You can find some specific instructions on disputing credit report errors in our Home Buyer's Guide to Credit.

Improving a Credit Score

In this scenario, let's say that you request your credit score from a website like MyFICO.com, and you find that your score is pretty low (lower than the national average). You know that a good credit score will help you get a good interest rate on a mortgage, so you want to improve your bad credit. This is different from correcting an erroneous report. For instructions on improving your credit score, check out our Home Buyer's Guide to Credit.

I hope this article helps clear up some of the confusion about bad credit report repair and similar topics. Remember, your credit scores and reports are two different thing. You will want to correct any errors you find on your reports ... and you'll want to repair a bad credit score if you find out you have one. They are two different things, but both are important topics for home buyers.

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Learn more about this subject:
The Home Buyer's Guide to Credit
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