Credit Reports
By [http://ezinearticles.com/?expert=Jim_Eastman]Jim Eastman
If you've ever applied for a loan or credit card, chances are your lender acquired and examined a copy of your credit report before deciding whether or not to grant you credit.
Your "Credit Report" is a record of your credit history and it's prepared by agencies called "Credit Bureaus", or "Consumer Reporting Agencies." These are private organizations and have no affiliation with the United States (or any) government. There are 3 major credit bureaus in the United States (2 in Canada) and their names are Experian, EquiFax, and Trans Union.
Did you know that credit reporting is a multi-billion dollar a year industry? It's true! The credit bureaus are for-profit organizations that generate billions of dollars in revenue each year from selling copies of credit reports to creditors and mailing lists.
Your credit report affects more than your financial life. It could affect your education, career, and even your relationships. Your credit report is used not only by lenders and creditors, but also by auto, life, and home insurers, future employers, and even some educational institutions. It affects the interest rates you'll pay on everything!
So as you can see, your credit report can have a critical impact on many facets of your life. For example, because of a bad credit report you could be forced to pay tens of thousands of dollars MORE in loan interest over the life of your home mortgage. This is no exaggeration!
Since the credit bureaus prepare and distribute your credit report to lenders, they clearly wield a great deal of power over both your financial and personal life. But it would be a grave mistake to be intimidated by them, or to think that you have no choice but to live with the negative effects of a bad credit report.
In fact, there's plenty you can do!
Always remember; Knowledge is power! There're a few facts the credit bureaus would rather you don't know. Let's take a look at them, and you'll see why.
1. Credit reports are filled with errors!
It will probably astonish you to learn the percentage of credit reports that contain errors. While there seems to be some disagreement, estimates range from 1 out of every 3 (on the low end) to as high as 90%! Here's a "run down" on error estimates.
Percentage of Credit Reports Than Contain Mistakes
Attorney General of NY 1/3
Consumers Union 48%
US Congress 1/2
Charles Givens Organization 90%
So no matter who you believe, it's clear that way too many credit reports have errors. So even if you think you have good credit, it might be well worth your while to get a copy of your credit report and take a careful look at it.
2. The law is on your side!
In 1972 Congress passed the Fair Credit Reporting Act (FCRA) to curb abuses by the credit bureaus. The FCRA is the governing federal law on the issue of credit reporting.
Under the FCRA, you have the right to dispute negative information in your credit report. The credit bureaus then have 30 days to verify the disputed information with the creditor. If they cannot (or do not) verify the disputed information within 30 days, it must be deleted from your credit report.
3. Even accurate data in your credit report must be deleted if it's not verified.
If you've done any research into credit repair you've no doubt run across statements to the effect of "Negative data in your credit report that is accurate cannot be removed." As stated above, the FCRA stipulates that any disputed information must be verified within 30 days, or it must be deleted. The "burden of proof" (in a manner of speaking), is on the credit bureaus.
4. Credit repair DOES WORK in most cases!
You'll hear all kinds of opinions as to whether "credit repair" (i.e. efforts to improve your credit report) can be successful. The truth is, credit repair doesn't always work perfectly. But in almost every case the process of credit repair will result in at least SOME improvement in your credit score, and most often that improvement is substantial. So credit repair does work!
Now you may be wondering why repairing your credit score would be of any concern to the credit bureaus. After all, don't they make money by compiling and distributing credit reports regardless of whether those reports are negative or positive?
Well, yes they do, BUT...they also make money (a GREAT DEAL of money) selling names of people with poor credit, to creditors who have a specific interest in those people.
So why would some creditors want to bother with people who have poor credit? Because they know they can charge higher interest rates to those people, because the "bad credit risks" have no choice but to pay those exorbitant rates or forgo credit altogether!
Besides, investigating disputed information costs the credit bureaus time, manpower, and money. They have nothing to gain, and plenty to lose, when people take the initiative and dispute negative information on their credit report.
5. It's perfectly legal to hire third party help to repair your credit.
There are plenty of "Credit Repair Agencies" who will help you repair your credit. But if a credit bureau even suspects you're using such an agency, it's likely they'll try to discourage you from doing so. In some cases they'll even go so far as to send you a letter stating that use of such agencies is illegal.
Such statements are (to put it as politely as possible) garbage! In fact there are laws that regulate such agencies. Now laws don't exist to regulate illegal activity, except to ban it! When was the last time you saw laws that regulate what cocaine dealers must do to operate within the law?
Once again, repairing a bad credit report just isn't in the best interest of the major credit bureaus. But unless you happen to be the CEO of one of those bureaus, the most important question as far as you're concerned is "What's in MY best interest?"
First of all, get a copy of your credit report and examine it. You can get a free copy of your report at rel=nofollow [http://www.annualcreditreport.com]http://www.annualcreditreport.com.
Secondly, take steps to improve your credit report. You can go about it in one of two ways.
1. Hire third party help.
If repairing your own credit report sounds too intimidating, there are plenty of credit repair agencies that will do it for you. But if you take this approach, there are three things you need to know.
First, they're not cheap. Expect to pay from $2,500 to $5,000 for an attorney or $795 to $2,000 or more for a credit repair agency. Secondly, they don't always do it right! Some will manage to get the negative data on your credit report removed while actually doing damage to your "credit score" (a calculated number used by creditors to evaluate you credit worthiness.) Finally, many are outright scams!
That's not to say you shouldn't hire third party help. If you do your "home work," ask for references, and carefully select a reputable credit repair agency, you'll be much better off than if you had done nothing. Still, if you're willing to do a little work, there's a much better alternative.
2. Repair you own credit report.
Anyone can fix their own credit report. If you can write a few letters, address, stamp, and mail them you can repair your own credit. There're plenty of good books available that can walk you thought the whole procedure, and once you're done a little study, you'll be surprised at how simple the process is.
Bad credit will cost you many thousands of dollars and limitless anxiety. Even if you have fair credit, fixing you credit could still save you thousands in interest payments over the years.
Get a good book on the topic of credit repair, and get started fixing your credit report today! And don't be intimidated by the credit bureaus. Remember, the law is on YOUR side!
Jim Eastman is support contact for ErasingBadCredit.com. For information on how to [http://www.erasingbadcredit.com]fix credit visit [http://www.erasingbadcredit.com]http://www.erasingbadcredit.com.
Article Source: [http://EzineArticles.com/?Credit-Report---5-Secrets-Credit-Bureaus-Dont-Want-You-to-Know&id=137871] Credit Report - 5 Secrets Credit Bureaus Don't Want You to Know
Terminology You Need to Know to Understand Your Credit Report
By Brian DeAntonio
NEGATIVE CREDIT CAN COME WITH SERIOUS PROBLEMS
Your credit report is a snapshot of your "consumer character" and as such, can have some pretty bad implications with the wrong information. Our lives for the most part revolve around the decisions we make and we are presented with those decisions daily, sometimes multiple times a day. Poor decisions, such as overspending or over extending yourself from a credit perspective can have a lasting effect on you and your ability to continue making similar decisions at a later date and time, sometimes, in the case of a bankruptcy, up to ten years. So to an extent, your credit report is direct reflection of the consumer freedom you will enjoy or with negative credit, it will be a direct reflection of your lack of freedom.
Negative credit can affect you in many ways, from getting housing, a car loan, a job, and even security clearance. If you have been turned down for a mortgage, a car loan, an apartment, or a job because of your credit, you know from personal experience how a negative credit report can painfully impact your life. Unfortunately, there isn't anything that can solve these problems quickly. However, there is a specific process and laws in effect that can help you to start fixing your credit. There are two ways to do this: 1) hire someone to do it for you, or 2) do it yourself and spend the time necessary figuring it out and preparing the necessary documents. When doing it yourself, you may want to seek the guidance of a professional to be sure you did it correctly.
THE GOOD, THE BAD AND THE UGLY
Let's take a look at what's good and what's bad. First, let's set the parameters to which we are evaluated. The FICO system, a system that summarizes your credit risk for lenders, produces a score between 300 and 850 and we all fall somewhere in that range. The interest rate you get when you apply for a loan will depend on this score and that can be worth thousands over the life of a loan.
- Scenario #1, if you have not had any negative marks against your credit, and by negative we are referring to collections activity, late payments, tax liens, judgments, etc. in the last 24 months and no bankruptcy or foreclosure in the last five years with a credit score above 700, you have a good credit profile.
- Scenario #2, if your credit score is below 630 and you have all or even some of the items mentioned above, you have a bad or less than favorable credit profile.
- Scenario #3, if your score falls somewhere in the middle of the scores above and you have some of the items mentioned above, you have a mediocre credit profile.
In the credit scoring business, different scoring companies use different scoring models. They do this because credit isn't just credit - there are mortgages, consumer credit, and revolving credit and installment loans. Scores will and should vary between the different scoring methods depending on the facts. On top of general negative items associated with your credit report, there are other variables to consider and they all have a different weight when calculating your score.
- Payment History - 35%
- Amounts Owed - 30%
- Length of Credit History - 15%
- Types of Credit in Use - 10%
- New Credit - 10%
HOW TO READ YOUR CREDIT REPORT
Your credit report contains a wealth of information about your financial activity. Although credit reports are not easiest reports to understand, the bureaus providing the reports have tried to make them as user-friendly as possible.
Personal Information
The first section of your report will cover basic information like your name, address, and place(s) of employment. This section is used to identify you as the reports owner. Most likely, previous addresses and places of employment will also be included.
In this section, it's not uncommon to have misspellings of your name or variations thereof. Because these misspellings and variations usually link you to a piece of credit, credit reporting agencies will usually leave these variations. It's your job to ensure your personal information is identifying you and not someone else.
Account History
This section of your credit report contains the majority of the information about your credit. This section lists each of your accounts and details how you paid on each of them. Your account history will be extremely detailed and will most likely be the hardest section to read; however, it's important you read through all of it to make sure the information is being reported accurately.
As far as collection accounts, they may appear as part of the account history or in a separate section, usually labeled negative credit. Where it appears will depend on the company providing your credit report. Within the account history, there will be several pieces of sub-information.
- Company name of the institution reporting the information.
- Account number associated with the account. The account number may be scrambled or shortened for privacy purposes.
- Type of account, i.e. revolving account, education loan, auto loan.
- Terms of repayment. Installment loans include the number of payments. Revolving accounts may leave this section blank or as "revolving".
- Date opened. The month and year the account was established.
- High credit is the highest amount ever charged on the credit card. For installment loans, high credit is the original loan amount.
- Credit limit or loan amount.
- Balance. The amount owed on the account at the time data was reported.
- Past Due. Amount past due at the time the data was reported.
- Account status. Indicates the status of the account, i.e. current, past due, charge-off. Even if your account is current, it might contain information about previous delinquencies.
- Payment history. Indicates your monthly payment status since the time your account was established.
- Date reported. The last time the data was updated by the creditor.
Public Records
This section will include information like bankruptcies, judgments, tax liens, state and country court records, and, in some states, overdue child support. Depending on the type of account, a public record may remain on your credit report between seven and ten years, ten years being reserved for bankruptcies. This section is a collection of the bigger mistakes, not criminal arrests or convictions but enough to severely damage your credit.
Credit Inquiries
This section provides a detailed list all parties who have accessed your credit report within the past two years. While your version of the credit report lists several credit inquiries, not all of these appear on the lenders' and creditors' versions. Only "hard" inquiries are shown to lenders. These are inquiries made when a lender checks your credit report to approve your credit application. Your version will also include "soft" inquiries consisting of inquiries made by lenders for promotional purposes.
Initially, if you need help, try your loan officer if you are applying for credit and see if they will take some time to explain it to you. Most of them will try to help as best they can, especially if you are trying to repair your credit because the loan officer would eventually benefit when he originates a loan for you. If you were not working with a loan officer and you are trying the DIY credit repair method, you might consider a free consultation with a credit repair company to learn the basics. They will assist you in understanding your credit report and should tell you some of the advantages and disadvantages of doing credit repair on your own or through a credit repair company.
No matter where you are or what you're doing you you can see advertisements and promotions regarding consumer financing. Credit scores play a huge role in every aspect of our financial lives - from qualify for loans to employment opportunities, and even insurance premiums. Arguably, a consumer's credit score has become one of the single most important measurements of a person reviewed and considered by lenders and potential employers. The information reported by the credit bureaus about you impacts almost every part of your financial life and can save you or cost you thousands of dollars.In 1970 congress created the Fair Credit Reporting Act. A federal law designed to protect a consumers right to a fair and accurate consumer report. One of the most important FCRA protections is the consumers right to dispute errors in his or her credit report. This law was created to ensure everything on your consumer report and can be verified, that's the key, can these companies validate the debt - you would be shocked at how many companies are holding people to a debt they no longer have the paperwork on.
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The History of Credit and Your Credit Report History
By Brian DeAntonio
Should you repair your credit? I'm asked that more than you think. When I ask my clients, you would think the answer would be resoundingly obvious; however, as we'll see, there isn't anything obvious about it. First, let's start by reviewing what credit is, the different types of credit and how credit became such a necessary component in our society.
The word credit is derived from the Latin credo, common translation, "I believe". Credit can occur on a transactional or revolving basis and is consummated when one party provides resources to another party. What truly makes it credit, is when the party extending the resources does not expect to be immediately reimbursed, thereby creating a debt for the borrowing party. Although the concept is fairly straight forward, the problem still exists, how do you choose the people you will extend credit to and how much will you extend? We'll get into that a bit later in the article. For now, let's look at the types of loans that are readily available to those who qualify.
The Installment Loan
Let's take a trip back to New York City, circa 1807, Cowperthwaite & Sons Furniture Store began an installment credit plan allowing people to buy today but pay over a period of time. To start, a down payment was made by the customer that was followed by monthly payments of equal amounts. The concept mirrors the "non-credit" card loan payments we make today. Cowperthwaite & Sons Furniture Store was extremely discriminant as too the customers they would allow to purchase furniture on their installment plan. They hand-picked their credit customers to keep those who defaulted to a minimum.
Fast forward almost 50 years to 1850 and the cutting edge of technology, the Singer Peddle Sewing Machine. The sewing machine, at the time, presented a unique challenge; being sold for $100 how was Isaac Singer going to mass produce and mass distribute the sewing machine. Edward Clark, co-founder of the Singer Sewing Machine Company, originated the "hire-purchase plan", the prototype for all installment selling or time payment purchases. As a result, people who would not be able to afford a sewing machine under normal circumstances could now purchase a Singer sewing machine and pay later. Even better, they could increase their productivity, earn more money and improve their position in life.
Revolving Credit
First introduced by the Strawbridge and Clothier Department Store (also Hecht's and Macy's in future years) in the 1960's, the revolving line of credit gave people the opportunity to buy things without paying for them that day and it also gave the store another stream of revenue in interest. In revolving lines of credit, the terms aren't fixed as they are in the installment loan model. Soon after the department stores began capitalizing on the "charge cards", banks jumped into the mix with larger limit credit cards, after all, loaning money is their business.
Here is an example of how a revolving credit actually works. You apply for a revolving line of credit, a credit card, and you are approved to spend up to $500. You immediately go out and purchase a new bike for $75. You can now only spend a maximum of $425 before reaching your credit limit. Now, you purchase a concert ticket for $75, leaving $350 as your available credit limit. At the end of the month, you have a decision, pay off your current debt, $150 or, don't pay the debt this month. By not paying the debt, you will have to pay interest on the $150 and you limit remains $350 until the debt is paid. Revolving credit, especially credit cards, typically have high interest rates and it's not uncommon to see interest rates exceeding 15%.
As you can see, revolving credit provides a unique and valuable service - when used responsibly. In this example above, you used your revolving line of credit as needed, if you had obtained an Installment loan of $500 you would have had to pay interest on the full amount, $500, rather than just the amount that you had used, $150. Once you pay the $150 - plus interest back, your available limit will then increase back to its previous maximum, $500. When used irresponsibly, revolving credit can become an unmanageable nightmare. So, the questions remains, when to approve and how much.
The Big Three and Two More
Does anyone remember the "Welcome Wagon" representatives? You move into a new neighborhood and the Welcome Wagon representative sets a time to come over and deliver baked goods, coupons, advertisements for local businesses, etc. Well that's not all they were doing. Retailer's Credit, now Equifax, used to gather data about you during those "welcome visits". Information such as, race, ethnicity, the quality of your home, furnishings, their opinion of your character, etc. Back then, trying to see what was in you report was nearly impossible. It could be riddled with mistakes, error and incorrect information but you would never know. Even if you did know, there was nothing you could do.
Today, there are three mainstream Consumer credit Reporting Agencies (CRA), Equifax, Experian and TransUnion. The fourth, Innovis, is similar in nature to the main CRAs; however, Innovis is not used nearly as much in terms of reporting. Companies who use them will usually say, we report to all four bureaus.
There is a fifth bureau out there called PRBC, it is similar to the other four CRAs in that it is an FCRA (Fair Credit Reporting Act) compliant national data repository. However, PRBC differs in a few distinct and consumer favorable ways. Consumers are able to self-enroll and report their own non-debt payment history. They can build a positive credit file based on alternative data, such as rent, utilities, cable, telephone, and insurance that are not automatically or traditionally reported to the other bureaus.
Under the FCRA credit bureaus are legally known in the United States as Consumer Reporting Agencies. There are a number of important consumer protections which are made available as a remedy to consumers by the following acts and/or regulations, they are as follows; FCRA, Fair & Accurate Credit Transaction Act (FACTA), Fair Credit Billing Act (FCBA) and Regulation B. Additionally, there are two government agencies responsible for overseeing credit bureaus and the data furnishers which supply them with their data. The Federal Trade Commission (FTC) is responsible for overseeing all consumer credit bureaus. Data furnishers are regulated by the Office of the Comptroller of the Currency (OCC).
So now that we have the landscape of the industry, let's dig in a little and see how your credit affects just you. To start, take a snapshot in your mind of how you pay bills and accumulate debt. Would you say you're responsible, irresponsible or somewhere in the middle. Just having that idea, or snapshot, you probably have some idea of what is being report by the CRAs about your credit. Now just so we're on the same page here, all of these reporting agencies have different information based on what companies (the furnishers or creditors) report to them. Hardly an exact science and sometimes I wonder how fair our system actually is, but it's our chosen system so let's move on.
Based on the data available on your credit reports, you are assigned a number between 300, the worst and 850, or perfect. The data that is looked at can range from being late with a payment, having a charge-off to public records, such as, bankruptcies as well as liens or judgments. The most recognized and widely used credit score is the FICO Score, a credit score developed by the Fair Isaac Corporation. Lenders use your FICO score and other like it to help them make billions of educated credit decisions every year. Fair Isaac calculates the FICO Score based solely on information in consumer credit reports maintained at the credit reporting agencies. Ultimately, the FICO score estimates your level of future credit risk - remember, future prediction are best evaluated on past performance. Meaning if you did it before, we assume you will do it again.
CBS News reported four out of every five credit reports contains some error or inaccurate information, that's eighty percent! Where could you find a job where you could be wrong 80% of the time? How about a school you could be right only 20% of the time? That job and that school don't exist but the credit bureaus, seemingly the largest oligopoly of our time, are satisfied with those statistics and defend the industry to any naysayers the first chance it gets. How does this affect your report? Let's take a look.
Your Credit Report
Everyone in the United States over the age of eighteen is a consumer, from a technical perspective anyway. You can be issued credit by banks, car dealerships, department stores, gas stations, you name it. It's usually your start to becoming an adult, the next phase of your life after high school. Let's say when you started high school as a little freshman, some senior walked the halls spewing negative information about you, saying you're smelly and have a contagious rash. Now you have to start making friends that will follow you for the next four years. Not an easy task after the jerk senior went around spreading that inaccurate information.
So let's break this down. Jerk senior, or the Consumer credit Reporting Agency, has bad or erroneous information, or credit data, about you and wrongfully spreads it through the school, or the credit community, hurting your otherwise immaculate reputation, or credit report. Hopefully you are catching on.
Now, the senior has to answer to the school principal, or the Federal Trade Commission, who oversees the rules of the school. The senior rats out another student, the creditor or furnisher, thereby admitting the data he had was second hand and could not be verified. The principal ensures the senior is set straight and sends him on his way with accurate information about the freshman. Once he has this data, he and the freshman become best of friends. So in our example, what if the student wasn't smelly but did have a rash he was trying to get rid of. Well if the rash isn't verifiable and is in a place that can't be seen - it can't be used against him now can it. Same with your credit. Your report can say whatever they want it to say; however, by law, at any time you request, the CRA must verify the data it reports. Data such as, contracts, late checks, agreements, public record, etc.
What we have just learned is your credit report is basically your consumer reputation. Walk into a furniture store and fill out a credit app, will you get approved or turned down. What if the salesperson is your neighbor, hopefully you get approved. Otherwise, there will be a certain level of embarrassment for sure. Why chance it? You don't play around with your personal reputation why play around with your consumer reputation?
Now you can certainly go it alone with the CRAs, creditors, furnishers, collections agencies, etc. and the federal government requires any credit repair organization to tell you that. We don't have special relationships or powers to do anything you can't do yourself, other than experience and education in the industry. To that, I always ask, if you were being charged with a serious crime and the judge looked at the attorney and made him tell you he doesn't have special relationships or powers to do anything you can't do yourself, other than experience and education in the industry. Would that make you want to represent yourself? Remember two things they say about self-representation in court, "a lawyer who acts for him or herself has a fool for a client" and "ignorance is not a valid defense".
However, when selecting a credit report organization, I do caution you to use due diligence and/or red flags of illicit or illegal behavior. Here are some key things to look out for:
- Avoid Credit Repair Services That Promise the Impossible
- Avoid Credit Repair Services That Suggest You Create a New Identity
- Select Credit Repair Services with Credible References
- Avoid Credit Repair Services Requesting any Payment Upfront (It's illegal and against federal law.)
- Avoid Credit Repair Services Who Avoid Using a Mutual Contract.
No matter where you are or what you're doing you you can see advertisements and promotions regarding credit and financing. Credit scores play a huge role in every aspect of our financial lives - from qualify for loans to employment opportunities, and even insurance premiums. Arguably, a consumer's credit score has become one of the single most important measurements of a person reviewed and considered by lenders and potential employers. The information reported by the credit bureaus about you impacts almost every part of your financial life and can save you or cost you thousands of dollars.In 1970 congress created the Fair Credit Reporting Act. A federal law designed to protect a consumers right to a fair and accurate credit report. One of the most important FCRA protections is the consumers right to dispute errors in his or her credit report. This law was created to ensure everything on your credit report and can be verified, that's the key, can these companies validate the debt - you would be shocked at how many companies are holding people to a debt they no longer have the paperwork on.
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It Pays to Be Aware of Your Credit Reporting Rights
By Sergei Lemberg, Esq.
Negative information on your credit report can harm you and impact your life in many ways. Creditors and debt collectors don't always play fair when it comes to the items they report to agencies. The Fair Credit Reporting Act sets out certain credit reporting rights that are important for you to know and understand.
Your credit report contains a great deal of personal, private information about you, information gleaned from many sources. That collection of information can greatly impact your life in many ways. It may determine whether you get a job or are accepted as a tenant in an apartment you want to rent. It determines whether you get a credit card, auto loan or mortgage, and how much interest you're charged for it.
One of the places that consumer credit agencies like Experian, TransUnion and Equifax - the three largest reporting agencies in the country - get their information about you is through reports made by your creditors. Because your credit score has such a big impact on your life, there are laws regarding how your report can be used, who can access your report, what can be listed on your report and what you can do if your report contains erroneous information. The Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act, commonly known as FCRA and FACT, also provide penalties for debt collectors who falsely report negative information about you and for those who improperly use your report. They also provide tools that allow you to check your credit report at no cost under specific circumstances.
Your Right to Know
You have the right to know what's in your credit report. Under FCRA and FACT, you have the right to receive your report free of charge from each of the three major credit reporting agencies once each year.
If you've been denied credit, turned down for a job or refused insurance because of something in your credit report, you have the right to request a free copy of your report within 60 days of being told you were denied. The credit card company or other entity is obligated to tell you on which report they based their decision so that you can request the right report.
You also have a right to know when a creditor, debt collector or other reporter sends negative information about you to a consumer reporting agency. Under FCRA rules, creditors must inform you before they report negative information to a reporting agency. But that notice doesn't have to be separate. It's enough for them to include a statement on a bill or other communication stating that the company may report information about your account to consumer reporting agencies. They must also notify you within 30 days if they report negative information about you to a consumer reporting agency.
Disputing Inaccurate Information
Consumer research says that 70 to 80 percent of all credit reports contain inaccurate information, and that 25 to 30 percent of reports contain inaccurate information that can make it difficult to get credit or a good interest rate. That inaccurate information may include such things as old credit lines that you no longer use, outdated information that should have been removed from your credit report because of age and inaccurate information reported by debt collectors. Any of that information can have a serious impact on your credit. That's why it's important to check your credit report regularly and to dispute any inaccurate information that you find.
If you find inaccurate information on your credit report, you should notify the consumer reporting agency that you dispute the information. The credit bureau must investigate your dispute and require the entity that reported the information to prove the accuracy of their report. If the creditor finds that you're correct, they must notify all three credit bureaus of the error and make a correction. If they refuse to do so, you can request that the credit bureau include a letter of dispute from you with your credit report and send a copy of your letter to anyone that requests your credit report.
In addition, there are special provisions for those who have been victims of identity theft or fraud, and rules about who must get your permission before accessing your credit report.
If you believe that a creditor has falsely supplied information about you to a credit bureau, or that your report has been accessed or used improperly, it's important to fight back. There are fair credit lawyers who will help you file a federal lawsuit for violations of the FCRA. If your suit is successful, you may receive a judgment for actual damages or between $100 and $1,000, as well as court costs and attorney fees.
Sergei Lemberg, Esq. is the Principal of Lemberg & Associates, a law firm specializing in fair debt collection law [http://www.stopcollector.com], lemon law, and other consumer law.
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The Truth About Credit Reports
By Sheena Jones
Credit bureaus are pretty bad at keeping accurate records. In fact, there's at least a 1 in 3 chance that your credit report contains inaccuracies... and that's a LOW estimate. The Charles Givens organization estimates that an unbelievable 90% of credit reports contain inaccuracies!
So as you can see, using even the low estimate, it's very probable that items in your credit report have mistakes, or may not even be your accounts at all! But worst of all... even ONE mistake can result in you being turned down for credit!
The Fair Credit Reporting Act
It's because of these abuses in credit reporting that the United States Congress passed the Fair Credit Reporting Act (FCRA) in 1972.
The FCRA empowers the consumer under Federal law regarding their credit report, among them the right to insist that credit bureaus verify information in their credit report the consumer believes is being reported inaccurately.
We Look Into Possible Errors On Your Credit Report
We all well-versed in consumer rights under the Fair Credit Reporting Act, and with the remedies available to you to make sure that everything in your credit report is being reported accurately.
We will review and analyze your credit report and look for items that we think, based on our expertise, have a high probability of being incorrect. After identifying probable items of concern, we will guide you in dealing with the major credit bureaus to make sure that errors are corrected, as required by the FCRA.
What Manner of Errors Can Occur?
1. Wrong accounts
2. Details of an account are being wrongly reported
3. Timely payments being reported as late
4. Mortgage details are incorrect
5. Incorrect employer information
6. Salary being reported incorrectly
7. Wrong address being reported
8.You applied for an account but never opened it
9. Your child opened an account in your name
10. Payments made were not credited
11. Paid off accounts are not shown as paid off
12. Report shows pending legal actions when there are none
13. Accounts that were paid are inaccurately being shown as collection accounts
14. Settled legal actions still show as pending
15. Credit limit amounts incorrect
16. Paid car loans still showing as open
17. Social security number incorrect
18. Report incorrectly shows you as having filed for bankruptcy
19. Report shows a bankruptcy pending that was already discharged
20. Account closed by you is shown as closed by the merchant
21. Report shows a foreclosure as pending that was already settled
We Set Up a Plan to Act on
In conference with you, we will prepare and put into practice a strategy to help you confirm and verify that all the accounts in your credit report are being reported accurately... to confirm and verify that it was you in fact who applied for all the accounts in question, and that every detail of those accounts is being reported correctly.
We will guide you in carrying out the plan, and we will work with you in the execution of the plan until all the items in your credit report have been either verified as accurate or have been corrected.
We Also Investigate Various Other Factors in Your Credit Report
Negative account information in your report isn't the only issue that can cause you to have a low credit score. But this is where a lot of "Credit Repair Agencies" quit!
But we don't stop there. We go beyond just challenging account information in your credit report.
Did you know that the number of requests for your credit report can lower your score? And since the credit bureaus have such a problem keeping accurate records, there's a high likelihood that requests were made that you did not authorize (as required by law).
Another important issue is the "debt ratio"... your level of debt compared to your "credit limit." We also help you to adjust these levels to improve your credit score.
"Types" of debt also affect your credit score. Too many debts of the same kind (revolving or installment debt) can bring your credit score down. We'll look for difficulties in this area and guide you in reaching a better balance.
Sheena Jones Own I Am Financially Fit and offers credit restoration [http://iamfinanciallyfit.org/] and fix credit repair [http://iamfinanciallyfit.org/]
Article Source: https://EzineArticles.com/expert/Sheena_Jones/691321
http://EzineArticles.com/?The-Truth-About-Credit-Reports&id=4589876
How to Read a Credit Report - A Basic Guide
By Greg Ford
Kieran needed a car and went to a Honda dealership. She found an Accord that she fell in love with. She was crush to learn that financing would not be approved. There were a couple of items on her credit report showing as defaulted and unpaid. By coincidence, she recently had gotten her credit report for something else; but she didn't really understand what she was looking at. The accounts were paid and had a zero balance. She later contacted the credit bureau and had the report corrected and updated. But the Honda dealer said she had to wait 90 days to re-apply. They later sold that Accord to someone else. This could have been completely avoided and Kieran would have gotten the car she wanted if she would have known what the credit report was saying. Then she would have corrected it, BEFORE she applied for the loan.
That is the purpose of this article. This information will provide a basic overview of the standard credit report. It will give the reader a guide on how to read, and understand, their credit report.
There are only 3 major credit bureaus in America. Experian (use to be TRW), Equifax, and Trans Union. Any other bureau that may be in your local area is in some way affiliated with one of these three major bureaus. Any person, or company, that pulls your credit is getting it either directly or indirectly from one of these three bureaus. These 3 are the only credit bureaus that matter in the U.S.
So... How do you read your credit report?
It is not surprising to hear that, Experian, Equifax, and Trans Union all do their reports differently. But overall it really doesn't matter because all credit reports are basically divided into four sections: Your Identifying Information, Your Credit History, Your Public Records, and the Inquiries which have been done on you.
1) Identifying Information: This section tells everyone who you are. Your social security number, your date of birth, and your name. Your name can be listed more than once to show each different way it has been spelled over the years. If some car dealership ran an inquiry on you 10 years ago and misspelled your name, it will be on your credit report forever. Of course for females it is going to list your maiden last name and your married last name, then if you got divorced and went back to the maiden name, if you remarried, etc. There can be a lot of variations of your name here. The important thing is to look at each one to make sure you recognize it.
Other information in this identity section may include your include your current address, your previous addresses, and telephone numbers. Also driver's license numbers, your employer, previous employers, your spouse name, etc. Anything that contributes to identifying who you are.
2) Credit History: This is also sometimes called the accounts list, or your trade lines. This section will list your current and active accounts as well as any credit you have had in the past that was reported to the credit bureau.
In general, this section is going to list everything in the past 7 years. Most agree that the credit bureaus computers automatically delete anything that has "the date of last activity" that exceeds 7 years. For example if you open a account at Sears in June 1995 and made payments every month, then got delinquent and made your last payment on March 2004. Then March 2004 is the "date of last activity" and when the 7 years will start counting down. Then, say you want to try and fix your credit and sent them a payment in Oct 2007. The 7 years will start all over again from Oct 2007.
Each account listed will include the name of the creditor and the account number. The Credit History section will also include:
- When you opened the account
- Whether the account is in your name alone or with another person
- Total amount of the loan, this is call the high credit limit or highest balance on a credit card
- How much you still owe
- The set monthly payments if a loan, or the minimum monthly payment if a credit card
- Current status of the account (open, inactive, closed, paid, etc.)
- How well you've paid the account
How well you paid on the accounts is one of the main things that everyone checking your credit is looking at. It is reflected in a two part code.
The first part is a letter that will either be an I or an R. The I means installment loan, which is a set amount and set monthly payments such as a mortgage, car loan, student loan, etc. The R stands for revolving debt such as a credit card, department store card, line of credit, etc.
The second part is a number from 1 to 9. The 1 indicates that there have been no delinquencies and the account is current and paid on time. The 9 indicates numerous delinquencies, missed payments, partial payments, etc. Obviously 1 is the best, then 9 is the worst, and then there's all the stages in between. Bottom line, anything other than a 1 is not looked at too favorably.
The codes are not difficult to understand once they are explained. People want to see I1 and R1. However they frequently create questions. Experian has started to insert plain language description like... never pays late... typically 30 days late... defaulted... etc.
3) Public Records: This is a section that you want to be blank. It only list negatives things related to your credits that were the result of a court action. Bankruptcies, judgments, tax liens, wage garnishments, etc. An entry in this section will hurt your credit faster than anything else.
4) Inquires: Just as it sounds, this section is a list of everyone who asked to see your credit report.
Inquiries are divided into two types. Hard inquiries are the ones you initiate by applying for something like a loan, credit card, etc. Then Soft inquiries are from companies that want to send out promotional information to a pre-qualified group, it can also be your current creditors who are monitoring your account.
You may have heard that a large number of inquiries can have a negative impact. That is true but it usually takes a very significant amount to effect you. A certain amount of inquires is expected and considered a normal part of life. If you are looking to buy something like a home, or car, you are expected to shop around, and two or more of these inquiries in the same 14 day period counts as just one inquiry.
As stated earlier, there are many credit companies who all get information either directly, or indirectly, from one of the main 3 credit bureaus. Then they format their credit reports in many different ways, and list things in different order. However they all will contain these 4 basic sections.
It is very important for you to know how to read your credit report. And to know exactly what is on it.
Some in the consumer credit industry estimate that as many as 80 percent of all credit reports have some kind of mistake, misinformation, or contains something that has not been updated.
If you find a mistake on your credit report. You will need to contact each of the 3 main bureaus, Experian, Trans Union, and Equifax. If you have acceptable proof, especially the creditor's own documentation like a receipt, you can fax it directly to the credit bureau. Otherwise the creditor will have to be contacted and they have 30 days to respond.
We hope this article has been a benefit to you. Our intent was to provide the basic information that would show anyone how to interpret and read a credit report. It is the only way to determine if it is correct, or if you need to take action to have it updated. If you are planning on buying a home, a car, or applying for any kind of credit in the near future, then you need to know what is on your credit report before it is reviewed. It is never considered as an inquiry when you request your own credit report.
Consumers Info USA uses real consumer surveys, and customer feedback to recommend the best online services. For more information about credit reports, credit scores, and a link to order your 3 in 1 credit report, Go Now to: www.badcreditassistance.com/tri-merge-credit-report
Article Source: https://EzineArticles.com/expert/Greg_Ford/5444
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Understanding the Consumer Credit Report
By Alexander Wright
A consumer credit report is a limited record of your personal information as it relates to your consumer credit activities. It is primarily used by lenders and creditors to determine your credit reputation or credit worthiness when deciding to extend you credit or grant you a loan. Although numerous smaller credit reporting agencies (CRAs) exist, there are only three major credit reporting agencies (CRAs) that are widely accepted; TransUnion, Equifax, and Experian. The consumer credit report is separated into a few major categories with the most common being Credit History, Public Records, Collection Accounts, Inquiries, and Personal Information.
The Credit History section displays some of the most common information that you would expect to see on a consumer credit report such as real estate mortgages, credit cards, lines of credit, personal loans, and auto loans. While displaying some of the most common information that you might expect to see such as the account name and account number of each account, this section of the consumer credit report also displays the status of each account and whether it is current or past due in payment. This section of the consumer credit report goes into further detail by displaying the balance, minimum payment due, and payment history of each account.
The Collection Account section of the consumer credit report displays information on accounts that have been charged off by the creditor and sent to collection agencies. The collection name and collection number should be exhibited along with the original creditor's information. It should also exhibit the date in which the account was charged-off and sent to collection along with the dollar figure the collection agency is seeking to recover.
The Public Records section of the consumer credit report is reserved for county and state court records & displays such items as foreclosures, bankruptcies, judgments, and tax liens. While numerous consumers do not have items that fall into this category, it is not uncommon for this section to be missing from the consumer credit report. Foreclosures, judgments, bankruptcies, and tax liens/civil liens are considered to be some of the most derogatory items that can be found on a consumer credit report. They have a very serious negative impact on the consumers credit score and a tremendous influence on a creditors or lenders decision to issue credit or grant a loan.
The Personal Information section of the consumer credit report consists of numerous items such as your full name, current and previous addresses, any known aliases, social security number, year of birth, current & past employers. If available and available, this section will also exhibit similar information about your spouse.
As some of the terms used in this article may be unfamiliar to you, I have listed numerous terms and their corresponding definition below in order to help you understand the common consumer credit report.
Credit Report: A complex report containing the credit history of a consumer. A consumer's credit report is generated by a credit reporting agency and contains information provided by the consumer's present and past creditors to be used in determining the consumer's credit worthiness.
Credit Reporting Agency: Credit reporting agencies, often referred to as credit bureaus, are companies that collect, manage, and report information received from creditors and collection agencies regarding the individual consumer. The three largest and most commonly known credit reporting agencies are: TransUnion, Equifax, and Experian. Many consumers believe these companies to be official government entities, which is a common misconception. In fact, they are for-profit companies.
Collection Account: A debt that is considered to be a loss or expense by the creditor. The creditor will attempt collecting that debt through the use of an internal collection department, outsource the account to a contracted collection agency, or sell the debt to a third party for a reduced price.
Chapter 7 Bankruptcy: The most common form of consumer bankruptcy, Chapter 7 Bankruptcy typically releases a debtor from any and all liability for the credit accounts included in a bankruptcy. In exchange, the debtor must usually forfeit some personal property. A Chapter 7 bankruptcy remains on the debtors consumer credit report for 10 years.
Chapter 11 Bankruptcy: Although Chapter 11 Bankruptcy is normally used for businesses, it can be used by consumers in specific rare cases involving extremely large debt. However, Chapter 7 and Chapter 13 can be much simpler and provide better protection for most consumers.
Chapter 13 Bankruptcy: Chapter 13 is a type of consumer bankruptcy under which the debtor does not forfeit personal property. Rather, the consumer agrees to a three- to five-year wage earner plan to repay all or part of their debt. A Discharged Chapter 13 bankruptcy remains on a consumer credit report for 7 years from the date filed. An Open or Dismissed Chapter 13 bankruptcy remains on a consumer credit report for 10 years from the date filed.
Foreclosure: The legal process by which a creditor may sell mortgaged property to recover a defaulted mortgage.
Judgment: A determination by a court of law that, in the case of credit, may require a person to satisfy or pay a debt.
Tax Lien: A charge upon real or personal property for the satisfaction of debts related to taxes.
Civil Lien: A charge upon real or personal property for the satisfaction of some debt or duty ordinarily arising by operation of law.
Inquiry: An instance in which all or part of your credit file is accessed by a company or individual. Inquiries stay on your consumer credit report for not more than two years.
Alexander Wright is a professional article writer that specializes in writing articles and providing free information on credit repair and credit restoration for Credit Restoration Bureau (CRB). Credit Restoration Bureau is a professional credit restoration organization and is one of the country's leading authorities in credit repair and credit restoration. It's helped thousands of American consumers get a fresh start through credit report repair. Credit Restoration Bureau is located in the Hampton Roads area of Virginia and can be contacted at: 1-888-342-6758.
Article Source: https://EzineArticles.com/expert/Alexander_Wright/518398
http://EzineArticles.com/?Understanding-the-Consumer-Credit-Report&id=3923156