Credit reporting agencies are one of the most complained-about financial institutions, according to the Huffington Post. And New Mexico has the ninth-highest rate of credit reporting complaints in the nation, a new study from NerdWallet Found.
New Mexico submitted 187 credit reporting complaints out of 893 total complaints to the CFPB in the first 11 months of 2016, according to NerdWallet. Nationwide, in instances when consumers cited a specific issue in their credit reporting complaints, incorrect information on a credit report was by far the most common problem, making up nearly 74 percent of all complaints. Debt collection, mortgages and credit cards made the list for other top financial complaints in 2016.
Mo Marwan, an owner and broker with Albuquerque-based Vision Mortgage, said he has seen a lot of clients with lower credit scores using credit repair companies that boost their scores temporarily by disputing information on credit reports.
“There has been extreme growth of people doing credit repairs for clients now,” he said.
He said disputing information on a credit report can temporarily boost an individual’s score, which they may be relying on to get a decent interest rate on a car or home loan. But he said if a dispute is resolved with the information found to be correct, the individual’s score will again drop down to what it was before they disputed the charge.
Marwan said people worried about information on their credit reports should contact creditors directly before reporting to the bureaus that the information is wrong.
“If a bank sees a client disputing an account, it can’t close a loan until that’s resolved,” he said.
Marwan said the best way to improve a credit score is by paying down revolving debt and large balances. NerdWallet also offered those tips.
In November the personal financial site found that borrowers in Albuquerque had a median credit score of 713, ranking No. 67 out of the top 100 metro areas in the U.S. New Mexico overall had the ninth-worst credit with a median score of 704.
Because credit scores can impact everything from ability to get hired to ability to get a personal or business loan, they have spinoff effects for business in New Mexico.
A borrower with poor credit could pay up to $250,000 more in interest payments over his or her lifetime than someone with excellent credit, according to credit.com.