PEMBROKE PARK, Fla. – When a Local 10 News viewer reached out to the Call Christina team about his downgraded credit score due to an unpaid debt on his credit report, Local 10 News sought advice on how to challenge and improve credit ratings.
"This is the marks on my credit report. The 697 has always been above 750," Luis Barranuevo said.
Barranuevo's credit score took a hit after a car financing company reported him for a debt he didn't know he owed.
"It's not fair," Barrnuevo said.
Having a good credit score is vital. Our lives revolve around it. "Because bad credit costs you a lot of money," consumer protection attorney Jason Weaver said.
So what's a really good score? Local 10 News asked some viewers.
"Credit scores you see them over 800 now, which is real good," Guy Abbotoni said.
"700, 720 -- anything over 700 I would consider good," Stan Cohen said.
A good credit score is more than just paying your bills on time. Those three digit numbers are the key to our financial health. The credit scoring system gives lenders information on who is most likely able to repay a debt.
FICO, or the Fair Isaac Corporation developed the formula to determine our score. It's based on a few factors. How much money we owe, new credit inquires when we apply for credit, the length of our credit history, the types of credit we have such as loans and our payment history.
That score is reported by the three credit reporting bureaus Experian, Equifax and Transunion. Through the Fair credit reporting act or FCRA, you as a consumer are allowed to request a copy of your credit report yearly.
READ: How credit scores are calculated.
"Life works on your credit rating. There are things that we need to buy in our day to day life whether it's a house a car, a car repair, a refrigerator that we can put out all the cash at once. We can't afford it we need credit," Weaver said.
In Barranuevo's case, a lower credit score translated in him paying a higher interest rate for a new car.
"We ended up having to pay one percentage point more because my credit score was not over 700," Barranuevo said.
He tried resolving the issue with the financial company, then the collection agency and credit reporting bureau before calling Local 10 News' Call Christina.
"All they kept saying to me was, 'Well, the only way you can make it better is if you pay the money, at least it looked like you paid the money," Barranuevo said.
But Weaver said many times credit reports can contain errors.
"There is a whole world of errors on credit reports that you're probably not aware of because they are mistakenly reported to your credit report. In the neighborhood of 70 percent of people's credit reports is incorrect," Weaver said.
Weaver has some suggestions on how to challenge your credit report if you think something is an error.
First, send a dispute letter telling the credit reporting company, in writing, what information you think is inaccurate.
Secondly, ask for a reinvestigation. As a consumer you have right to start a reinvestigation process if you think it's wrong. If it can't be verified, it has to be removed from your credit report. If it's not taken off after a dispute, you may have the right to sue under the Fair Credit Reporting Act.
Third, get your credit report yearly and look at it. It's free. Review it and don't be afraid to ask questions.
Click here to get your free credit report.
"Don't assume just because a company says you owe the money, you owe the money," Weaver said.
The Call Christina team contacted the finance company on behalf of Barranuevo. He had been a repeat customer in good standing and they decided to excuse the debt of $300. It has since been removed it from his credit report.
Follow Christina Vazquez on Twitter @CallChristinaTV
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