Occasionally, credit bureaus are slow to record paid-off loans, especially student loans. Since credit scoring is only as good as the data fed into the system, it’s important to have backup paperwork.
Data on paid-off judgments, collections account, and other credit problems can take a long time to work through the system. It’s especially important in these cases that you have the paperwork clearly showing the payoff along with your canceled checks.Too many loan approvals get held up at a critical time, jeopardizing purchase of that dream home because the buyers lost or didn’t keep vital paperwork.
Keeping your finances on Quicken, Microsoft Money, or a similar software program is a great way to track your accounts. You can record your payments with dates and check numbers, and if a question arises, you can print out the payment histories and payoff dates along with the check numbers. Creating a paper trail can save you time, frustration, and bank research fees.
Correcting Credit Problems
Credit reporting is not an exact science, and errors and misreporting are all too common. Fortunately, you can usually clear up most errors and problems on your own, without paying hefty fees.
Should a dispute with a credit source or agency arise, you have remedies available through the Fair Credit Reporting Act (FCRA). This isn’t a way to erase legitimate late pays on your report, nor is it a wizard to turn bad credit into good, but it is a legal avenue for you to remove errors.