Regardless of how much debt you do or do not have, your credit score is an important part of your financial profile that needs to be monitored carefully.
In the past, my husband and I have had both legitimate debt and illegitimate debt on our credit reports that were affecting our ability to get new credit (home, credit cards, cars) as well as get a new job (I had been turned down from a VERY good job at a bank only due to bad credit. They had expressed that they would have hired me otherwise).
As an example of how extreme illegitimate debt can be on your credit card, my husband is a JR. He and his dad both of the same name, but one is a SR and one is a JR. They obviously have different social security numbers. HOWEVER, we've found over and over and over again that his dad's debts (even a tax lien!!) were on my husbands report even though the debts clearly belonged to his father.
So what do you do?...
1) Pull your credit report from all 3 bureaus.
2) Highlight ALL of the negative debt reportings (even those that are legitimate!)
3) Either go online to create a dispute or put your dispute in writing. For items that are clearly NOT yours, explain the situation in detail and close with a request that they remove the debt. For items that are yours, but are negative, simply ask them to verify the debt.
The credit companies have 30 days to either verify that the debt is yours, or remove it from your credit profile.
This does take time and organization, but it is worth it. After removing quite a bit of legitimate and illegitimate negative items from our credit reports, we are now in the process of buying our first home.
To clarify, YES, even legitimate debts can be removed from your credit report. Once you've asked them to verify the debt, if they don't hear back from the creditor within 30 days, they MUST remove it from your report, regardless of it's legitimacy.
You should do this at a minimum of once per year. If you are preparing to buy a new home or need a new car, I would recommend doing this every 3 months until you are satisfied that the debts that can/should be removed have been.
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