Did you know that everyone is looking at your credit report?
Your employer probably saw a copy before hiring you, and your landlord probably considered it before accepting you as a tenant. Long distance phone operators and cell phone companies even look at it before providing their services. And have you never seen your own credit report? In fact, according to a recent study, less than 20% of all Americans have ever seen their credit report. Most people worry about their credit report only when they are denied credit. By then, it is usually too late.
You should review your report at least once every 2 years. This way, the information remains accessible and verifiable in case you need to correct it. You should also check your report before applying for any credit. This can help avoid unpleasant surprises. By letting you see exactly what your loan servicer will see, it can prepare you for any questions.
If you’ve never had a credit problem, you may think that you don’t need to worry. But according to a recent government study, one in four credit reports contains errors, one in six contains errors that could cause denial of credit. Sometimes they are accidentally combined and people with similar names or social security numbers share a credit report. It is not uncommon for family members to have overlapping data. It’s also not uncommon for a credit card or loan company to accidentally tell you that they haven’t made a payment.
Have you ever received a late notice or collection letter for something you already paid for? I’m sure he made a phone call or two and fixed it right away. But what about the monthly report to the credit bureau? You can’t help but wonder if the bug was corrected in that report. The only way to find out what’s really on your credit report is to see it for yourself. When you do, you may be surprised to see that your credit history looks very different than you expected. Past and present credit accounts that you expected to see may not be listed, and other accounts that you did not expect to see may be listed. This is not unusual because creditors are not required to report our account to a credit bureau. They are free to report only the information they consider appropriate.
This situation can come as a pleasant surprise if a previous loan that became delinquent does not appear on your report. It can also provide a very unpleasant surprise if something was reported that you did not consider important. Like maybe an unpaid magazine subscription, or worse yet, someone else’s delinquent account record. The only way to find out what’s in your report is to see a copy yourself!
Here are some questions and answers to help explain what a report is and how to get it.
What does it mean to have good or bad credit?
Good credit means that, according to your past creditors, your record is clean. He made payments and paid off his previous debts successfully. Having bad credit is the opposite. Your record shows that you have not paid your past debts as agreed. This could mean late payments, collections, defaults, etc. This information is stored in the “credit bureau” and is delivered to those companies that request it.
What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act is the federal law that governs credit reporting agencies. The law was written to protect consumers from the obvious power that credit reporting agencies can have over their lives.
Do I have the right to know what my credit report says about me?
Yes, the Fair Credit Reporting Act guarantees that right. This law also entitles you to obtain a copy of your report free of charge, with a credit denial letter, if that credit denial was due to information found on your credit report.
What’s in my report?
Your credit report contains information about your credit card accounts, loans, charge accounts, and public record items such as bankruptcies, tax ties, and judgments. It will list each registered account, who the account was with, how much was borrowed, how much was paid, and how timely payments were made. It will also list any accounts sent to collection agencies, accounts not paid in full, and loans in arrears.
Who has access to my report?
According to the Fair Credit Reporting Act, anyone with a “legitimate business need.” However, in most cases, the report is only provided to creditors, employers or prospective employers, landlords, and insurers.
Are ALL my accounts on my credit report?
Probably not. Companies have the right (but not the obligation) to report to any or all credit reporting agencies, at their discretion. Your previous creditors may have reported your credit experience to only one credit bureau, the big three credit bureaus, or they may not have reported it to any credit bureau. However, most large credit grantors report to TRW, TransUnion, or Equifax.
How much will it cost me to obtain a copy of my report?
You can purchase a report from the credit reporting agencies below for free. If you are in the United States and Canada, you can do this once a year. You can also get a free copy of your report from any credit bureau that has provided information that caused your credit to be denied.
For complete and up-to-date information on how to receive a copy of your credit report, you can contact the three major credit reporting agencies directly at:
TRW (800) 392-1122 Trans Union (714) 738-3800 Equifax (800) 685-1111
This information is provided for informational purposes only. The author assumes no responsibility. You should hire professional legal or financial assistance if necessary.
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Copyright 2008