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Credit Reports

What is a Credit Report?

Your credit report and your history will be reviewed by Count Me In or a bank when you apply for a loan.

Your credit history is a record of all of your credit transactions÷it is called your credit report. If you have ever applied for a credit card, an auto loan, or a loan from a bank, then you have a credit history, and this information would be collected in what is called a credit report about you. Financial institutions, car dealerships, credit card companies use this credit report and others to determine your credit history and if you have a history of repaying loans.

Credit Reporting Agencies÷commonly called credit bureaus÷gather information about each of us and our credit transactions. They sell this information (your credit report) to credit card companies, banks, insurance companies, potential employers, and others who use the information to decide whether to give you a loan, offer you a credit card, or hire you.

What Information Is Contained in a Credit Report?

Your credit report includes your name, address, birth date, social security number, and the name of your employer. Various accounts with creditors (loans, credit cards, and certain other debts) are listed, showing how much credit has been extended and whether you have paid on time. If an account has ever been overdue, this will be noted, and if it has been referred to a collection agency, this will also be noted.

Public information such as bankruptcies, foreclosures, or tax liens will be included in your credit report.

There will be a record of any request for your credit record within the past year and a record of any request related to employment for the past two years.

It may also have information about your employment history, home ownership, income, and previous address.

How to Get a Copy of Your Credit Report

Most financial advisors suggest that you check your credit report at least once a year, and also take a look at it if you are thinking about any major purchase, such as a home or a car. It is important to know what is in your credit report, and to correct any inaccurate information.

You have the right to obtain a copy of your credit report, and to have the credit bureau correct any inaccurate information in it. Negative information can make the difference between getting a loan and being denied a loan, so it is crucial that you examine your credit report carefully and make sure itâs accurate.

First, check your local yellow pages under ãcredit reporting agenciesä or ãcredit rating and reporting.ä You may have a file in more than one agency, so you should contact all of the ones that are listed to see if they maintain a file under your name and social security number. You can call or write an agency to request a copy of your report. Most companies have a toll-free number that you can call to find out what they charge for a copy. The average cost is about $8 per request.

If you are denied credit (turned down for a loan or a credit card), you are entitled to a free copy of your credit report, as long as you request it within 60 days of the denial of credit. You can also get your report free if you are unemployed, if you are receiving public assistance, or if you believe your credit file contains inaccuracies resulting from fraud.

The three largest companies are:

Equifax

P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111
www.equifax.com

Experian

P.O. Box 949
Allen, Texas 75013
(888) 397-3742
www.creditexpert.com

Trans Union

P.O. Box 2000
Chester, PA 19022
(800) 888-4213
www.tuc.com

There are many private companies that will act as a go-between and obtain your credit report for you. These are for-profit companies that charge between $13 and $28 for their services; they may save you time, but they probably wonât save you money. You can use one of these services or you can get your report directly from the credit bureau.

How to Correct Your Credit Report

When you read your credit report, you may find mistakes or inaccuracies. Under the law, credit bureaus are responsible for investigating and correcting inaccurate or incomplete information.

You must contact the credit bureau in writing to inform them of the information you believe is incorrect. In addition to your name, address, and Social Security number, the letter should state each item in the report that you dispute, what you believe to be the correct information, and why. Request a correction or deletion, and include copies of any documents that support your position. You may want to enclose a copy of your report with the items circled. Send the letter by certified mail, return receipt requested, so you can document that the credit bureau received your letter. Keep copies of all of your correspondence.

The credit bureau is required to investigate within 30 days (unless it considers your dispute frivolous) It must also notify the creditor involved, as well as all other credit bureaus, of the correct information. Finally, it must give you a free copy of your credit report if the dispute results in a change to your report.

Sample Dispute Letter

Your Name
Your Address
Your city, state, zip code
Date
Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip code

Dear Sir or Madam:

I am writing to dispute the following information contained in my credit report. The items I am disputing are circled on the attached copy of my report.

This item [identify item by name, source, date, and type of item] is [inaccurate or incomplete] because [describe what is wrong and why]. I am requesting that the item be [deleted or changed] to reflect the correct information.

Enclosed are copies of [describe your documentation, such as payment records, receipts, canceled checks, court documents] supporting my position. Please investigate this matter and [delete or correct] the disputed item as soon as possible.

Sincerely,

Your Name

Enclosures: (list what you are enclosing)

If you believe that a credit bureau or a creditor is not satisfying its legal obligations regarding your credit report, call your state attorney generalâs office, banking commissioner, or office of consumer affairs. Every state has an agency that enforces compliance with the Fair Credit Act.

What About Negative Information in Your Credit Report?

Negative information may appear in your credit report. You may have been late in paying a bill, declared bankruptcy, had a loan go to a collection agency, or other problems. Most information appears in your credit report for seven years. Exceptions to this rule are:

• Bankruptcy information may be reported for 10 years.
• 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.
• Information about criminal convictions has no time limit.
• 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 requested for an application for more than $150,000 worth of credit or life insurance has no time limit.

How Does Being Married Affect Your Credit Report?

If you are married, you are responsible for your own debts and any debts that you incur jointly with your spouse, or with anyone else. You are not responsible for your spouseâs individual debt. If you and your husband have a credit card in both names, you are jointly responsible for the bills if you both signed the application.

What is an insufficient credit file?

Many people are denied credit because they have what is called a thin file ö they have little or no credit in their name. To build a credit file, you must borrow money and repay it according to the terms of the loan. You could obtain a credit card, use it a little each month, pay it off regularly, and generate a credit history. (You do not build a credit history if you apply for a credit card but never use it. You must use the card and make repayments for a credit record to show up on your file.

How to repair your credit history?

You may already have a poor or bad credit history. A ãbadä credit history can be caused by bills that have been paid late or not at all, inaccurate information or too much overall debt for your income. It is important to pay your bills on time, to avoid any further debt or financial problems and to establish a budget that you can maintain according to your income. You can write the credit bureau to correct any inaccurate information.

What about divorce and my credit records?

You are responsible for all of your joint accounts in which you both applied to be listed on the account. You are not responsible for individual accounts. Many women find their credit history impacted by a divorce. Payment of bills are late when there are disagreement behind who is to pay what; one spouse may refuse to pay on joint accounts, or may try to hold you responsible for all of the debts. It is important to apply for credit in your own name and build your own file. It is also important to discuss this issue with your attorney at the time of the divorce. If you divorce, you may want to close joint accounts or accounts that your spouse can sign.

What about married women and their credit records?

Married women often have limited credit histories or thin files in their own names. Joint accounts are often listed under the husbandâs name with no records showing on the wifeâs credit file ö unless she has credit in her own name as individual rather than a joint account. Women are often penalized in the lending process for weak or limited files when they apply for credit in their name. It is important to establish credit in your own name with at least one or two charges that are individual accounts. This is especially important if you plan to apply for a business loan using your credit file.

For more information on credit reports see:
www.ftc.gov/bcp/conline/pubs/credit

For information on getting a bank loan click here:
http://www.onlinewbc.org/docs/finance/loanpack1.html