One of the most important things that you can do to take control of your financial situation is to check your credit report regularly. Your credit report has the ability to affect many different areas of your life in addition to affecting your ability to secure a loan, including your ability to rent an apartment or your ability to secure an employment position.Get your free credit report today.
Before you start repairing your credit history, you must know 100% what you need to repair. Your credit report will contain all the information you need to start repairing your credit. You’re entitled to free credit reports from each of the three credit bureaus once a year. You can also order your credit reports directly from the credit bureaus for a fee.
A recent studie have shown that as many as 25% of the credit reports held on file by the three major credit bureaus contain errors that can adversely affect the person’s credit score and ability to obtain financing from lenders or the low intrest rate that you deserve. By checking your credit report regularly, you can see any information that has been recently added to your credit report and can have the information correctly quickly before it negatively impacts lender approval for financial products you desire. It is also easier to prove your case when these matters are handled quickly and increases the chances that you will not be liable for any activities that other people have fraudulently added to your credit profile.
Despite lenders' willingness to loan money, a good credit record from three mayor credit bureaus, experian, equifax and transunion is as important as ever . Almost all lenders have come to rely heavily on computerized profiling to determine what credit they're willing to extend to a potential borrower. Information comes from hundreds of other factors, your payment history, card balances, auto loans, retail accounts etc. The end result is a numerical score that guides lenders in the terms they offer for a variety of financial products.
High scorers over 700 get the lowest interest rates and higher credit lines. Those with low or failing "grades" will get very little and pay plenty. For them the rate on a mortgage will be as much as 6% points higher than the prevailing rate most credit-worthy customers get. A high credit score not only gives you better terms today but may be important in the future should interest rates rise and credit standards tighten.START FIXING YOUR CREDIT NOW!
Don’t let anyone fool you into thinking you need to hire a professional to repair your credit. The truth is, there is nothing a credit repair company can do to improve your credit that you can’t do for yourself. So, save yourself some money and the hassle of finding a reputable company and repair your credit yourself for now lets just start with getting your free credit report analyze it and identify any discrepancy on it.
Fair Credit Reporting Act The Fair Credit Reporting Act promotes the accuracy and privacy of information in consumer credit reports. It also controls the use of credit reports and requires consumer reporting agencies to maintain correct and complete files.
According to this act, you have a right to review your credit report and to have incorrect information corrected.
Issuing Credit Reports
Credit bureaus, the most common type of consumer reporting agency (CRA) that compiles and issues credit reports, are required to help you understand your report. Reports can be issued only to those with a legitimate business reason. These include creditors, employers, insurers, and government agencies reviewing your status for licensing or benefit purposes, or any third party for whom you request a report.
Credit Report Errors
If you find an error on your report, you should notify the credit bureau in writing immediately. The bureau is responsible for investigating and for changing or removing any incorrect data. The source of the error must then notify all consumer reporting agencies where they sent information. If you are not satisfied with the correction, you have the right to add a brief statement (100 words or less) about the issue to your credit report. The statement should be a clarification, not an explanation, of credit problems.
Denied Credit
If your credit application is turned down because of an error on your report, the lender is required to provide you with the name and address of the credit bureau that issued the report. Then, you have 30 days to request a free copy from the bureau. The bureaus must disclose to you all information in the report, its source, and who has recently received the report.
You have the right to have the credit bureau re-issue corrected reports to lenders who received reports within the last six months, or to employers who received one in the past two years.
Disclosure
Consumer reporting agencies must provide you access to the information in your credit report, as well as identify those who have requested the information recently. There is usually a charge for each report, unless you have been denied credit recently.
You are entitled to one free report a year if you certify in writing that: (1) you are unemployed and plan to look for a job within 60 days, (2) you are on welfare, or (3) your report is inaccurate due to fraud.
Limiting Access
You may request that consumer reporting agencies do not distribute your name on lists used by creditors and insurers to make unsolicited offers of credit and insurance. Requests can be made by telephone or in writing by filling out a form available from each credit reporting agency. For telephone requests, call (888) 5 OPT OUT to be excluded from Experian, Equifax, and Trans Union. Telephone requests last for two years; written requests are permanent.
Consumers have the right to sue consumer reporting agencies, users, and providers in state and federal court for violations of the Fair Credit Reporting Act.
Equal Credit Opportunity Act
The Equal Credit Opportunity Act requires that individual creditors apply credit standards in a fair manner, so that all consumers are given an equal chance to obtain credit. It does not require all creditors to have the same standards, nor does it guarantee approval of loan applications.
In reviewing your credit application, lenders cannot discriminate on the basis of sex, marital status, race, religion, national origin, age, income from assistance programs, or if you exercise your rights under the Consumer Protection Act. The only acceptable criteria are your ability and intent to repay funds borrowed.
Prohibited Information
Credit applications cannot ask you about your sex, race, color, religious affiliation, or national origin unless you are applying for residential real estate. Even then, you are not required to answer. The information is used only to enforce fair housing laws, not for evaluation purposes.
You cannot be asked your marital status, unless your spouse will help secure, use, or be legally responsible for the loan. Creditors are also prohibited from asking about your plans to have children.
Credit for Couples
Spouses have the right to have their credit histories listed separately, including the accounts they use jointly. Married women have the option of using their birth name or married name. In the case of couples who jointly established credit, but whose credit appears in the name of only one spouse, the other partner has the right to rely on that credit history as well.
Divorced Individuals
If you pay or receive alimony, child support, or maintenance, you can be asked how these items affect your income. However, if you do not plan to use this income to repay the loan for which you are applying, you do not have to list it on your application.
Age
Creditors can ask how old you are in order to be certain you have reached legal age to enter into contracts. They can also consider your age to estimate how long you will continue to work. However, age cannot be used to deny credit to those 62 or older (in the case of credit-scoring systems) or to those applicants whose age exceeds that required for credit insurance.
Changed Circumstances
The terms of your credit cannot be changed simply because your life circumstances do. For example, the length, interest, or other features of loans cannot be changed; you cannot be forced to reapply for a loan; and you cannot be terminated because you change your name or marital status, reach a certain age, or retire.
Applicant Notification
Lenders must notify credit applicants of their decision within 30 days after the application is completed. If credit is denied, the creditor must provide a written statement that includes the action taken, reason for denial (or how to request it), the applicant's rights, and the name and address of the enforcing federal agency. If you believe that discrimination has taken place, you have the right to file suit. If creditors are found to have discriminated unfairly, they can be held liable for actual damages and punitive damages up to $10,000.
Fair Credit Billing Act The Fair Credit Billing Act provides for the prompt correction of errors on open-end credit accounts (department store credit accounts, for example) and protects consumers' credit ratings while they are settling disputes.
Under this law, if a consumer is disputing a charge, creditors cannot report the consumer's account as delinquent. This applies to open-end credit instruments, such as credit cards, revolving charge accounts, and overdraft checking. Consumers who question an item are responsible for notifying the creditor in writing within 60 days of receiving the bill. The creditor must acknowledge the notice within 30 days and may not do anything to damage the consumer's credit rating while the item is in dispute.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act promotes the fair treatment of consumers by prohibiting debt collectors from using unfair, deceptive, or abusive practices.
This act applies to professional debt collectors who collect on loans they did not originate. Though it technically does not apply to banks, department stores, and other lenders who collect their own debts, no reputable lender is permitted to use such practices.
Debt collectors are permitted to contact people other than the debtor only to locate the debtor or make a reasonable effort to communicate with the debtor about the debt.
After making contact, debt collectors are required to send written notice informing the debtor of the amount of the debt, the name of the creditor, and the fact that the debt will be considered valid unless disputed within 30 days.
Debt collectors are prohibited from harassing, oppressing, or being abusive in collecting a debt. This includes using threats or obscene language, publicizing the debt, making annoying or anonymous telephone calls, and misrepresenting the identity of the collector, the status of the debt, and the consequences if it is not paid.
If debt collectors violate the Fair Debt Collection Practices Act, consumers can sue for actual and punitive damages.
Questions and concerns about credit bureaus and credit practices can be directed to:
Federal Trade Commission Consumer Response Center - FCRA 600 Pennsylvania Avenue, NW Washington, D.C. 20580 http://www.ftc.gov (877) FTC-HELP
Other resources for credit-related problems include:
(Name of credit bureau) (Address of credit bureau)
Attn: Consumer Relations
To whom it may concern:
On (date of investigation request), I sent you a request to investigate certain items on my credit report that I believe to be incorrect or inaccurate. As of today, (# of weeks you waited) have passed, and I have not yet received a response from you. Under the Fair Credit Reporting Act, you are required to respond "within a reasonable time." If the information cannot be verified, please delete it from my credit report. I would appreciate your immediate attention in this matter. Please inform me of the results.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
Thirty days ago I sent you a letter disputing certain items on my credit report which were inaccurate or incomplete. Attached is the original letter.
Please note that under the provisions of the Fair Credit Reporting Act (FCRA), 30 days is considered as reasonable time for responding to my request for verification of the disputed items, unless additional time is requested by your firm in writing. In addition, failure to verify these items within the 30-day period, constitutes reason to drop them from my file, pursuant to sections 623(a)(1)(b) and 623(a)(3) of the FCRA.
Please respond immediately so that I do not need to pursue my legal rights under the FCRA, which requires your compliance with the law.
Also, please send me a copy of the requested credit report to the address shown below.
Sincerely,
Your Name Address Date of Birth Social Security Number
I recently received my credit report and found problems of inaccurate reporting. A copy of the credit report is attached, with the items marked.
The presence of the inquiries as entries separate from the resulting account inaccurately duplicates information. The inquiries also reflect an incomplete and inaccurate processing of information in my file. The inquiry entries should be removed, or at least merged into the accounts to which they belong.
Under the provisions of the Fair Credit Reporting Act (FCRA), amended July 1999, please investigate and delete these disputed items. I will assume that 30 days constitutes reasonable time to complete this request, unless you notify me otherwise. It should be understood that failure to verify within this time constitutes non-verification, and the items must be promptly deleted according to the provisions of the FCRA.
Please send me a copy of the requested credit report to the address shown below.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
(Name of creditor or lender) (Address of creditor or lender) Re: (Your Name) (Your address) (Your account number)
To whom it may concern:
I have recently obtained a credit report from (credit bureau). It shows the above account with your company was (days late, charged-off, other problems, etc.) To the best of my knowledge, I have always paid this account promptly and satisfactorily. This incorrect information is seriously hurting my credit rating, and I would appreciate it if you would verify this information and correct it with all three credit bureaus. If the information cannot be verified, please delete the account from my credit report.
Please inform me with the results of your verification as soon as possible. Your immediate attention to this matter is greatly appreciated.
Reason for dispute: _________________________________
Please update my credit report and send me a copy at the conclusion of your investigation. In addition, send the results to the three major credit bureaus: Experian, Equifax, and Trans Union.
Thank you for your help and prompt attention to this matter.
(Name of credit bureau) (Address of credit bureau)
Re: Request for a Free Credit Report
To whom it may concern:
According to the attached letter, which states that my credit application was denied, your credit bureau was reported to have been used in the evaluation of my credit.
The Fair Credit Reporting Act, amended July 1999, provides that you send me a copy of the information used, which led to the denial of my application. According to this provision there should be no charges for this information.
Please send me a copy of the requested credit report to the address shown below. I have enclosed a copy of my driver's license to show proof of my identity and place of residence.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
(Name of credit bureau) (Address of credit bureau)
Please send me a copy of my credit report.
My full name is: My social security number is: My birthdate is: My current address is: My previous address is:
I may have received credit in the last five years under the following names:
Enclosed is a copy of my driver's license as proof of my name and address.
I am making this request for a free credit report since I have been denied credit in the last 60 days based on one of your reports. A copy of the denial letter is attached for your information.
Re: Explanation of Delinquent Account Number _______________
Dear Creditor:
It has recently come to my attention that several of my payments to the above referenced account have been labeled "late" on my credit report.
I have been prompt in paying in the past, and missed the payments due to: "Explain here"
Since these late payments occurred for an excusable reason, please correct the payment history for my account at the following credit bureaus: ____Experian ____TransUnion ____Equifax
It is important that my credit report reflect the good relations I have had with your company in the past. In addition, the requested corrections will make the report more representative of my financial habits.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
I recently received a copy of my Experian credit report. The credit report showed a credit inquiry by your company that I do not recall authorizing. I understand that you shouldn't be allowed to put an inquiry on my file unless I have authorized it. Please have this inquiry removed from my credit file because it is making it very difficult for me to acquire credit.
I have sent this letter certified mail because I need your prompt response to this issue. Please be so kind as to forward me documentation that you have had the unauthorized inquiry removed.
If you find that I am remiss, and you did have my authorization to inquire into my credit report, then please send me proof of this.
Thanking you in advance,
(Your Name) (Address) (Date of Birth) (Social Security Number)
According to the Fair Credit Reporting Act (FCRA), I have the right to enter a "Consumer Statement" in my credit report. I have disputed the accuracy and completeness of certain items on my credit report, and since reinvestigation has not resolved my dispute, I want the following statement, without alteration, placed in the file. "Your message here"
I assume that 30 days constitutes reasonable time for completing this update, unless you notify me otherwise. Please send an updated copy of my credit report containing this statement to the address shown below.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
You are hereby notified under provisions of Public Law 95-109, Section 805-C, The Fair Debt Collection Practices Act, to hereby CEASE and DESIST in any and all attempts to collect the above debt.
This letter is your legal notice under the above mentioned federal law that regulates the activities of collection agencies and their legal representatives.
Your failure to Cease and Desist, as directed in this letter, will result in charges being filed against you with the state and federal regulatory agencies empowered with the enforcement of this law.
You are further warned that NO derogatory information is to be placed on any credit reports after receipt of this notice, or that action will result in further charges being filed against you.
It is my firm decision not to recognize or work with any collection agency. I will settle this affair directly with the original creditor.
Please give this legal notice your full attention.
Sincerely,
(Your Name) (Address) (Date of Birth) (Social Security Number)
Will ordering my own credit report hurt my credit score?
No. Ordering your own credit report is considered a "soft inquiry" and does not affect your credit score. Soft inquiries are not visible to creditors who may view your credit report, but will show on a credit report delivered to you.
Mistakes do happen, and when they happen on your credit report it can be costly! A study by US PIRG (a national consumer watchdog organization) indicates that as many as 80% of credit reports contain at least one error, and as many as one fourth contain an error serious enough to result in the denial of credit.
A credit score is a number that summarizes your creditworthiness (how likely you are to repay a financial obligation) based on the information in your credit report compared to millions of others. Credit scores have stood the test of time for being powerful predictors of a consumer's future credit performance. Lenders routinely use credit scores to make quick yes/no decisions (such as instant credit approvals) or to determine the terms of a loan. Employers, insurers, landlords and other businesses routinely use credit scores.
A credit score is a number that summarizes your creditworthiness (how likely you are to repay a financial obligation) based on the information in your credit report compared to millions of others. Credit scores have stood the test of time for being powerful predictors of a consumer's future credit performance. Lenders routinely use credit scores to make quick yes/no decisions (such as instant credit approvals) or to determine the terms of a loan. Employers, insurers, landlords and other businesses routinely use credit scores.
Credit scoring is based on many factors that may include:
Payment history Amount of available credit Amount of credit currently being used Length of credit history Recent requests for credit Under the Fair and Accurate Credit Transactions Act (FACT), credit scoring may not use gender, martial status, national origin, race, or religion as factors.
Of course, lenders usually do not base credit decisions solely on credit scores. Lenders usually make other considerations, such as income and length of employment at current employer, when evaluating applications.
Also, many consumers do not realize that achieving the best credit scores may take 20 to 30 years because lenders consider older credit histories optimal.
There are three large national credit bureaus that supply most credit reports, and each of them may have a report on file for you. The three national bureaus are:
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