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Check Your Credit Report

You have a physical check to see if all is well. How about your fiscal health?

You check with a doctor and dentist periodically. You also check your insurance needs and update your will now and then. (I hope!) Then shouldn't you also check your credit report since so much depends on its accuracy. You should check your credit report annually, and probably every 6 months because one unsuspecting day, your loan will be turned down or your creditors will start demanding payment in full for no apparent reason. And you'll be left standing there wondering what happened!

Why can't you assume your report is correct? That answer and exactly what you should be looking for is what this article is all about.

The amended Fair Credit Reporting Act passed in 1996 enhanced the consumer's ability to protect their credit report. It did so by establishing laws and rules of conduct to enable consumers to be their own "credit-doctors." This article taught you the "how-to". But unless you take the initiative to care for your report, the law will be nothing more than words in a book.

Why Should I Check My Credit Report? It's one thing to have bad credit, but it is another to have errors on your credit report through no fault of your own. The result, however, is the same-- unless you correct it.

Did you know that you pay a higher interest rate on you car and mortgage with questionable credit? Were you aware that insurance companies can turn you down or put you in a higher risk category with higher premiums if they consider you a bad credit risk. Consider this: More employers now run credit checks for potential job selection and/or promotions than ever before in our history. Can you really afford to loose your next promotion because of a credit error?

Who can accesses your credit report?

  • landlords, utility companies, phone companies.
  • hospitals, doctors, dentists, insurance companies.
  • credit unions, finance companies, banks.
  • retailers, department stores, credit card companies.
  • car dealers, mortgagors.
  • investigators, lawyers, courts.
  • anyone who can offer just cause and/or has access as a member of a credit reporting agency.

How Can I Get My Report? Who Ya' Gonna' Call?Credit reports are available from three main reporting agencies: Equifax, Experian, and Trans-Union. Check your yellow pages under "credit agency" or "credit bureau" to see if any subordinate group is available locally. Even if one is listed, they each get their information from one of the three national bureaus and the "big three" do not exchange information with each other. Therefore each of the three may have different information dependent upon who has reported to them and what was reported. What is on one report may be different than what is on another.

  • EquifaxPhone 800-685-1111
  • Experian (formerly TRW)Phone 888-(888) 397-3742
  • Trans-UnionPhone 800-888-4213

How Much Does it Cost?You are entitled to a free copy of your credit report within 60 days of credit turn down if the report causing the decline was from Equifax or Trans-Union. Experian currently offers a free report within 30 days of turn down but also offers a free report annually. Of course, you are entitled to a copy at anytime from any of the three for a small fee ($2-$8).

Additionally, you can get a joint report from all three agencies from a number of commercial groups such as Consumerinfo.com or San Diego based Confidential Credit (Phone 800-443-9342). The cost of these reports are ordinarily higher than individual reports ($35-$50). These types of organizations usually offer a credit monitoring service, as well.

What Do They Need?Each agency will require you to submit your full name, address (for the last 5 years), phone number, social security number (SSN), spouse's name and SSN, and usually proof of address (utility bill etc.). When submitting this information, remember you are talking to a credit bureau. This means you are talking to anyone with access to your report.

What's In The Report? The formatting of each of the three national agency reports will vary but with each report you also receive a legend or instructions for interpretation. The legend is very important because it is how you check your credit report. If you simply say, "it's too complicated", you will never know what is in your file. So take a deep breath, go slowly, and take just one entry item at a time. Reading the report isn't that tough once you begin.

What to check and how to check it.

Things in common. There are some things common to each report. For example, all information falls under one of four categories: Personal, Reported Accounts, Public Record, and Inquiries.

  • Personal Information - In addition to your name, address, et.al., personal information includes such things as marital status, name change, spouses employment, your employment, position within company, salary, as well as former employers.
  • Reported Accounts - divided into 2 categories:  MONTHLY and DEFAULT...  1.) MONTHLY ACCOUNTS - Financial institutions, finance companies, commercial lenders, charge card creditors, larger department stores, as well as oil and gas companies all report your history monthly. These reports include your name, type of account (revolving, installment, etc.) account history, payment history, who owns the account (joint, etc.), credit limit, and current balance....  2.) DEFAULT ACCOUNTS - Landlords, utility companies, insurance companies, local retailers, doctors, and hospitals are some of the creditors who report only when the consumer has defaulted on a payment.

    Information usually includes your name and account information plus a delinquency report such a as 60, 90, or 120 days past due.

  • Public Information - Law suits, bankruptcies, liens, and court judgments are examples of legal public information. There may also be financial public records such as charge accounts, loans, and debts.
  • Inquiries -  The very important inquiries area includes: potential creditors, employers, landlords, as well as any others who have requested a copy of your report within the last 12 months. These inquiries often remain for 2 years. Be aware that too many inquiries could adversely tell a potential creditor you are desperate.  Even unsolicited credit offers through the mail appear in this area and they too can affect your loan procurement. The good news is that they are readily identifiable as promotional. The bad news is, they are still an inquiry.

 

What Am I Looking For? What you are looking for can be answered in one word-- EVERYTHING! Information which is erroneous, outdated, or irrelevant should be removed or corrected. 

Go through your entire report entry by entry. Have the credit agency legend by your side in order to verify coding compliance. Have also a paper and pencil to annotate any item you find in error. Go slowly! Here are eight items to check that have caused problems for others:

  1. Don't assume your personal information is correct. You could be viewing information from someone else's report with just a simple error such as: first name misspelled, missing Jr./Sr., erroneous address, bad zip code, wrong employer, or any other incorrect personal data.
  2. Insure marital information is correct. Are accounts listed as "joint" really joint? Is the report in compliance with court settlements?
  3. Outdated information is normally considered to be any item older than 7 years except for bankruptcy which is usually 10.
  4. Closed accounts should not be listed as open. Accounts you closed should reflect "closed by consumer". Otherwise it can be assumed that it was closed by the creditor-- not good.
  5. Accounts should not appear twice even in different sections.
  6. Incorrect histories such as late payments, a credit entry you do not recognize, a pre-marital debt of your current spouse, or other such items need your attention.
  7. Are there missing reports that would be beneficial to show a good history, and are profiles, credit limits, and balances correct?
  8. A former correction to your credit file which has since disappeared should be brought to the agency's attention.

What Do I Do If I Find Errors? It is your responsibility to report errors. At the same time The Fair Credit Reporting Act offers a great deal of consumer protection.

When notifying the credit bureau of errors, send your letter certified mail-return receipt so that you have proof they received it. Many authorities recommend no more than three disputes per letter and allowing 30 days for a response. If there is no response, send a second letter. If there is still no response, send a third with a copy to the FTC. 

If after the above, errors still appear, your next options should be a direct contact with the creditor involved asking them to correct the error. Obviously you want to include proof that you are in the right. You should also send a brief statement to the credit bureau stating the facts behind the error. It is your right to have a 100 word statement as part of your file.

Your final two options are extreme but sometimes necessary. The first is a law suit based upon a creditor's credit agency's violation of The Fair Credit Reporting Act (FCRA). The second extreme option is applying for a new SSN in order to obtain new credit. This step should be taken only as a final step and should be based on significant documentation supplied to Social Security Administration.  

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