Credit Reports can portray a financial image of you by detailing your
credit situation and your credit history. They provide information to
lenders, prospective employers, insurance companies, and other interested
parties about your finances and spending habits. The certified counselors at
CU Mortgage can show you how to retrieve, review, and analyze your credit
report and show you the right steps to take in order to update and correct
any errors. We offer counseling on how to:
- Obtain your credit report from each of the three credit reporting
agencies
- Analyze information on your report, identify errors, and properly
dispute any inaccuracies
- Identify, report, correct, and prevent credit fraud and identity
theft
- Establish and maintain a strong credit history
Our subscription services can help you maintain the integrity of your
report and keep you up to date on what is being reported about your
finances.
What It Says about You
Most people finance their homes with mortgages and pay for their cars with
loans. Young people often obtain loans to pay for college. And, of course,
lots of people make purchases with credit cards.
You can’t expect to receive credit as a matter of course, however. You
must apply for it. And just as you would hesitate to lend money to a
stranger, banks, retailers, or finance companies will not grant you credit
without knowing something about you.
It used to be that a retailer or bank would have to call each creditor
you listed on an application form before they would decide to extend credit
to you. Today, they rely on credit reports, so it’s important for you to
know what is in yours.
What Is a Credit Report?
A credit report is a record of your credit activities. It lists any
credit-card accounts or loans you may have, the balances, and how regularly
you make your payments. It also shows if any action has been taken against
you because of unpaid bills.
Where Do Credit Reports Come from?
A company that gathers and sells credit information is called a consumer
reporting agency (CRA). These types of companies collect information about
your credit activities, store it in giant databases, and charge a fee for
supplying the information. The most common type of CRA is the credit bureau.
There are three major credit bureaus that operate nationwide, plus many
smaller companies serving local markets.
What Is a Credit Rating?
Your credit rating is drawn from your credit report, which outlines your
borrowing, charging, and repayment activities. A good rating helps you reach
financial goals; a poor rating limits your financial opportunities.
Since your credit report influences whether you are able to buy a home
and get a job, it is extremely important to protect your credit rating by
making loan and bill payments on time and by not taking on more debt than
you can handle.
Who Is Allowed to See Your Credit Report?
Credit bureaus can provide information only to the following requestors:
(1) creditors who are considering granting or have granted you credit; (2)
employers considering you for employment, promotion, reassignment, or
retention; (3) insurers considering you for an insurance policy or reviewing
an existing policy; (4) government agencies reviewing your financial status
or government benefits; and (5) anyone else with a legitimate business need
for the information, such as a potential landlord. Credit bureaus also
furnish reports if required by court orders or federal jury subpoenas. They
will also issue your report to a third party if you request this in writing.
What Type of Information Is on Your Credit Report?
There are usually four types of information:
1. Identifying Information: Your full name, any known aliases, current
and previous addresses, social security number, year of birth, current and
past employers, and, if applicable, similar information about your spouse.
2. Credit Information: The accounts you have with banks, retailers,
credit-card issuers, utility companies, and other lenders (accounts are
listed by type of loan, such as mortgage, student loan, revolving credit, or
installment loan; the date you opened the account; your credit limit or the
loan amount; any co-signers of the loan; and your payment pattern over the
past two years).
3. Public Record Information: State and county court records on
bankruptcy, tax liens, or monetary judgments (some consumer reporting
agencies list non-monetary judgments as well).
4. Recent Inquiries: The names of those who have obtained copies of your
credit report within the past year (two years for employment purposes).
Where Do the Consumer Reporting Agencies Get Their Information?
Credit bureaus collect information from parties that have previously
extended credit to you, such as a department store that issued you a credit
card or a bank that granted you a personal loan.
Who decides whether or not to Grant You a Loan?
The lenders themselves make the decision about whether or not to grant
you credit. The credit-reporting companies only supply the information about
your credit history.
Why Should You Obtain a Copy of Your Credit Report?
To avoid any unwelcome surprises, it’s important to see a copy of your
credit report before you apply for credit such as car loans, mortgages, or
credit cards. Errors in credit reports can be common. Keep in mind, however,
that they are not part of a conspiracy against you. They are simply the
result of human error.
How Do Errors in Reports Happen?
Think about how often your mail has a misspelling of your name or a
mistake in your street address. Then, imagine the possibility for error in a
report that contains much more information about you. Cases of mistaken
identity, out-of-date information, and outright errors can easily occur.
How Do You Correct an Error on Your Credit Report?
Contact the consumer credit reporting agency immediately. The company is
then responsible for researching and changing or removing incorrect data.
This process may take as long as 45 days. At your request, a corrected
report will be sent to those parties that you specify who have received your
report within the past six months, or employers who have received it within
the last two years.
What if the Consumer Reporting Agency Stands by Its Report?
You have the right to present your side of the story in a brief
statement (100 words or less), which the credit bureau must attach to your
credit file. Your statement should be used to clarify inaccuracies, not
explain reasons for delinquency. Anyone requesting a copy of your credit
report would also automatically receive your statement (or a summary of it),
unless the credit bureau decides that it is irrelevant or frivolous.
What Should You Do if You Are Denied Credit because of Something in
Your Credit Report?
The lender who denied you credit must give you the name and address of the
credit bureau that produced the credit report. Then, you have up to 30 days
to request a free copy of your report.
The credit bureau must tell you the nature and substance of all
information contained in your report. It must also tell you the sources of
the information and who has received your report for the previous six months
(two years for reports furnished for employment purposes).
Late and missed payments will show up on your credit report and hurt your
chances of being approved for credit, life insurance, or employment. To find
out about organizations in your area that help consumers solve credit
problems and create a budget, contact the National Foundation for Consumer
Credit at (800) 388-2227.
Spanish speakers can call (800) 682-9832. Additional information on
improving a credit rating can be found in “How to Establish, Use, and
Protect Your Credit,” a brochure by the Federal Reserve Bank of San
Francisco.
How Long Does Information Stay on Your Credit Report?
Generally, all your credit history information, good or bad, remains on
your report for seven years. If you file for personal bankruptcy, that fact
remains on your credit report for 10 years.
How Do You Get a Copy of Your Credit Report?
You are entitled to receive one free credit report every 12 months from
each of the nationwide consumer credit reporting companies – Equifax,
Experian and TransUnion. This free credit file can be requested through
www.annualcreditreport.com or by contacting the companies directly by phone
or by mail as listed below.
To process your request, you will need to provide specific information,
such as your name, current and previous addresses, telephone number, social
security number, and date of birth. Also, to verify your identity, other
information such as a copy of your driver’s license, utility bill(s), or
bank statement may be required. Keep in mind that the three large bureaus do
not necessarily share information with each other. The content of your
credit report can be different at each bureau, so it’s a good idea to
request copies from each one.
To contact the three major credit bureaus:
Equifax
P.O. Box 105873
Atlanta, GA 30348
http://www.equifax.com
(800) 685-1111
Trans Union Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
http://www.transunion.com
(800) 916-8800 or (800) 888-4213
Experian (formerly TRW)
P.O. Box 2104 Allen,
TX 75013-2104
http://www.experian.com
(888) 397-3742