Credit And Credit Cards

Your credit report is a type of consumer report and contains information about where you work, live, what you own and how you pay your bills. It also may show whether you’ve been sued or arrested or have filed for bankruptcy. Companies called consumer reporting agencies (CRAs) or credit bureaus compile and sell your credit report to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it’s important that the information in your report is complete and accurate.

Estimates indicate that as many as three forths of all consumer reports are inaccurate or have information that should have been removed. Chances are your report has something that is inaccurate of outdated.

Logic would suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you’re considering making a major purchase, such as buying a home or a new car.

Checking in advance on the accuracy of information in your credit file could speed the credit-granting process.

Getting Your Credit Report

If you’ve been denied credit, insurance, or employment because of information supplied by a CRA, the FCRA says the company you applied to must give you the CRA’s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you’re entitled to one free copy of your report a year if you can prove that (1) you’re unemployed and plan to look for a job within 60 days, (2) you’re on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you up to $9.00 for a copy of your report.

If you simply want a copy of your report, call the CRAs listed in the Yellow Pages under “credit” or “credit rating and reporting.” Call each credit bureau listed since more than one agency may have a file on you, some with different information. The three major national credit bureaus are:

Equifax

P.O. Box 740241

Atlanta, GA 30374-0241

(800) 685-1111

Experian

P.O. Box 2104

Allen, TX 75013

(888) EXPERIAN (888-397-3742)

Trans Union

P.O. Box 1000

Chester, PA 19022

(800) 916-8800

Correcting Errors

Under the FCRA, both the CRA and the organization that provided the information to the CRA, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the CRA and the information provider.

First, tell the CRA in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the sample below. Send your letter by certified mail, return receipt requested, so you can document what the CRA received. Keep copies of your dispute letter and enclosures.

CRAs must reinvestigate the items in question—usually within 30 days—unless they consider your dispute frivolous.

Now we get to the good part. If you have several items to dispute and submit them at the same time the CRA will almost always consider your dispute frivolous. Sorry, that’s just the way it is. Your best bet is to dispute one or two items at a time. Send your letter, wait two weeks, send the next letter and so on. Best idea is to find something wrong with what is being reported. Check the details. Are the dates correct, the amount correct, the payments correct? Do you even owe the debt? Was it paid off?

The CRA must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file.

· Disputed information that cannot be verified must be deleted from your file.

· If your report contains erroneous information, the CRA must correct it.

· If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the CRA must show that you’re current.

· If your file shows an account that belongs only to another person, the CRA must delete it.

Now for the REAL story. The information provider will almost always responds saying they investigated and the debt is valid. That’s all it takes for the CRA to substantiate the debt and tell you to take a hike. Now think about it, you have a debt that is not yours and you go to the CRA to disputed it. They send a letter and to the no good company reporting you as a deadbeat and asked them to substantiate a non-existent debt. To add insult to injury that no good company tells the CRA it’s good debt and your SOL.

When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.

Also, if you request, the CRA must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the CRA, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct—that is, if the disputed information is not accurate—the information provider may not use it again.

Personally, after helping dozens of people clear negative, incorrect information from their credit reports I can tell in option 1 is a necessary step but for the most part a useless step. Going right to the creditor and documenting the attempt is by far the best way to remove the inaccurate information on your credit reports. After disputing the information to the creditor, documenting the attempt, and documenting the non response of the creditor you have irrefutable evidence to present to the credit bureau. According to the federal law they have no choice but to remove the incomplete or inaccurate information

Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years. There are certain exceptions:

· Information about criminal convictions may be reported without any time limitation.

· Bankruptcy information may be reported for 10 years.

· Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

· Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

· Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

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Adding Accounts to Your File

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don’t.

If you’ve been told you were denied credit because of an “insufficient credit file” or “no credit file” and you have accounts with creditors that don’t appear in your credit file, ask the CRA to add this information to future reports. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file.

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Sample Dispute Letter

Date

Your Name

Your Address

Your City, State, Zip Code

Complaint Department
Name of Credit Reporting Agency

Address

City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I
dispute are also encircled on the attached copy of the report I received.
(Identify item(s) disputed by name of source, such as creditors or tax
court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is
inaccurate or incomplete and why). I am requesting that the item be
deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any
enclosed documentation, such as payment records, court documents)
supporting my position. Please reinvestigate this (these) matter(s) and
(delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

Tags: bad credit, money, consolidation, loans, credit reports

Popularity: 1%

If you’ve ever applied for a credit card, a personal loan, or insurance, there’s a file about you. This file is known as your credit report. It is chock full of information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses with a legitimate need for it. They use the information to evaluate your applications for credit, insurance, employment, or a lease.

Having a good credit report means it will be easier for you to get loans and lower interest rates. Lower interest rates usually translate into smaller monthly payments.

Nevertheless, newspapers, radio, TV, and the Internet are filled with ads for companies and services that promise to erase accurate negative information in your credit report in exchange for a fee. The scam artists who run these ads not only don’t deliver — they can’t deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit as it’s detailed in your credit report.

This is why it is critical for you to fully understand how to read your credit report.

Credit reports are much easier to read now than in the past, because years of pressure from consumer advocates and regulators led to significant changes in the credit-reporting industry. The rise of identity theft was a key consideration for lawmakers when Congress wrote the Fair and Accurate Credit Transactions Act of 2003, which amends the Fair Credit Reporting Act. During that process, consumer advocates and others called attention to the growing importance of consumers understanding how the credit system works.

These days, bad marks on your credit report can determine whether you land the job you’re applying for, how much you pay for auto and homeowners insurance, and your credit card interest rate, plus whether you have to pay your utility or cell phone company a deposit.

But, despite tougher laws, including free reports for consumers, centralized fraud reporting, and more pressure on creditors to respond to consumers’ complaints, the credit-reporting industry is still, to a large degree, a black box, and credit reports are not nearly as clear and understandable as they could be. Consumers still get confused.

You should focus on identifying what’s bad on your reports and the information you’ll need for planning your repair effort. There are many different styles and formats of credit report, but most of them derive from one of the three super-bureaus that supplied the information being reported. Each of the three main credit bureaus uses a different format, plus each bureau’s format varies depending on whether you request the report online or order it by phone or mail.

On top of that, regional credit bureaus, from which mortgage lenders and others often buy reports, use their own unique format to list your credit information. The instructions are organized around identifying the basic information you need for repairing bad credit:

1. Credit name (and type of creditor)
2. Account number
3. Status
4. Lateness patterns

Some of the information, such as your name and address, won’t be new to you, but it’s useful to know what the credit bureau has listed anyway. Tiny mistakes in any of the most mundane information can affect your credit rating, especially if it means you’ve been confused with someone else with a similar name.

Also, each credit bureau offers information on its web site on how to read credit reports and how to submit a dispute, and also will mail you that information if you request your report by
mail. When communicating with the credit bureaus, be sure to include the credit report number at the top of your report. Experian calls it the “report number,” TransUnion says “file number,” and Equifax refers to it as a “confirmation number.”

Tags: credit cards, money, bad credit, personal finance, credit repair

Popularity: 1%

Years ago as a youngster I remember watching an episode of one of my favorite sketch comedies, in this particular episode a woman was about to venture out on a blind date.

When her suitor arrived at her door she was pleasantly surprised to find a handsome man glancing back at her. Knowing that he’d successfully made it past the first hurdle judging by her positive areaction, he confidently started to joke with her. He then thoughtfully placed her coat around her shoulders and before the slipping out the door a fax started to arrive. She began to read it, her smile fading by the second.

It was a background check on her date. She found out that he’d been married 3 times, relied on all his previous wives for alimony, was up to his ears in debt and served prison time for fraud. She ended the date before it even began.

Although only a comedy sketch, it does run along similar lines of a credit report, your next date won’t have privy to such intimate details of your financial situation, however, your bank or credit lenders do.

Why Is So Much Importance Given to Credit Reports?

It gives potential lending institutions a snapshot into your personal financial history. From this they can determine how you handle your current debt, if you pay your bills in a timely manner, how many loans you have and how much you owe. It also reveals if you’ve had troubles with other lending institutions in the past and if it required the assistance of a collections agency. This can be manifested as a negative mark against you in your report and adversely effect your credit rating.

The whole point of the credit report from a lenders perspective is to see if you’re a prime candidate to lend money to and the likelihood they’re going to get that money back, period. In fact any lending institution will know if they’re going to approve you within just 5 minutes of looking at your credit report. Imagine that, a life altering decision in the time it takes to cook an egg.

Things that Can Go Against You

If you have a sketchy payment history, this can be interpreted as negative from the eyes of the lending institution and be seen as a risk to lend you money.

A high debt to income ratio. All they’re concerned about is getting back the money they borrowed you with extra interest added on. The more you owe in relation to how much you make is a big concern for lenders as that means you’ll struggle to meet your weekly/monthly commitments to them.

Debt counseling also shows up on your credit report and raises concerns that you’ve had difficulty in managing your finances. Try to fix your credit as much as you can on your own. Carefully budget to catch up with lagging payments. If you need credit counseling then only do so as a last resort.

How to Beef Up Your Credit

You can strengthen your credit simply by disputing charges you’re not responsible for and getting those negative marks on your credit report removed, why tolerate blemishes tarnishing your credit score when you don’t have to? Write to the credit bureau and challenge any charges (accompanied with proof) you didn’t incur. It may take a few attempts but persistency is the key.

Create history. Establish a predictable pattern of payment by building a regular payment history. Banks and lending institutions like consistency, it means reliability and shows that you’re good at paying your bills.

Embrace your credit report. It pays to immerse yourself in your finances at least twice a year, that way you can track your own progress and quickly catch any inconsistencies or errors and correct them. This way you know your financial status and there are no surprises when it comes time to apply for a loan.

Tags: credit repair tips, money, consolidation, credit cards, bankruptcy

Popularity: 1%