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How Healthy Is Your Credit
There's only one way to discover the "health" of your credit. You need to examine your credit report. Your credit report is your "consumer identity" that potential lenders will use to judge your credit worthiness. Use these tips to give your credit profile the "tune-up" it needs for 2004. Tip #1- Check for Errors Your credit report or profile is more than just a collection of who your creditors are and how much you owe them or have paid them. The first thing you need to do is carefully check that your credit report is accurate. Nearly 70% of credit reports contain errors. These errors may be as simple as an incorrect middle initial or address. Or it could be as serious as a creditor reporting that you were late with a payment when in fact you were not late at all. This error might not seem like a big deal to you. However,to a future lender like a mortgage company it makes a big difference ! Carefully examine your credit report and if you find an error contact your creditor and the credit bureaus. Catch and correct these errors now before it hurts your chances of securing credit in the future. Tip #2 - Correcting Errors The two most common errors contained in credit reports are: 1) wrong account information 2) incorrect recording of late payments. If you find an account reported that does not belong you, you need to contact the credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft. Hopefully you'll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when they report an account belonging to a family member or someone with a similar name on your credit report. If your problem is an error in reporting a late payment you will need proof to back up your case before this error can be corrected or removed. The most common error occurs when a payment is reported as "late" when it was actually a current or "on time" payment. In either case, the problem can and should be corrected. You will need to correct the error in writing. Keep a journal or log of all calls and correspondence. The Fair Credit Reporting Act (FCRA) requires the credit bureaus and the agency reporting the information to the credit bureau to correct inaccurate information in your credit report. Therefore, it is important that you contact both the credit bureau and the creditor whose information is in dispute. A sample letter is included here to help you in correcting your credit profile. Make sure that you clearly identify the information that you dispute, include copies of receipts or documents that support your position. Then request that the information be corrected or deleted from your file. Send your letter by certified mail and request a return receipt from the recipient. Keep all correspondence that you mail out. Give the agencies involved 30 days to begin their investigation. You can call them but be aware that phoning them does not protect your consumer rights! You must notify them in writing to protect your rights. They must notify you of the results of their investigation. Although the process will take time, it's important to do it. This is your credit profile, your "consumer identity" that is at stake. Don't expect an error to correct itself. At your request, the credit bureaus must send notices of corrections to your credit profile to anyone who has requested your report in the last six months. If you applied for a job and were turned down because of inaccurate information in your credit report, you can have the corrected report mailed to anyone who received a copy in the past two years. ++++++++++++++++++++++++++++++++++++ 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) Originally Posted at www.ftc.gov/">http://www.ftc.gov/ ++++++++++++++++++++++++++++++++++++ Tip #3 - Budget Planning You can also use your credit report to help you plan and implement a personal budget. Your credit report will show you where you are spending your hard earned dollars. While the credit card balances may not be completely current, you'll still see which of your cards has the highest balance outstanding. If you have more than one major credit card you should compare the annual percentage rate (APR) you are paying on each account. If you are working on a budget to "pay down" your credit cards, start by paying down the one with the highest APR or interest. Once that credit account is paid off, move toward paying off the account with the second highest APR. Using this method you will be able to concentrate your efforts toward paying down your outstanding credit obligations. You should also check with your credit card company to see what's the best annual percentage rate (APR) they can offer you. If you are a good customer, you can often qualify for a lower rate than what you are currently being offered. Caution: Ask if the new rate you are getting is a "promotional" rate or a "contract" rate. A promotional rate will expire at the end of the promotional term, for example 6 months. A contract rate does not have an "expiration" as long as you continue to meet the terms outlined by your creditor for that rate. Tip #4 - Making a major purchase If you are considering a major purchase such as a car or a home, checking your credit report gives you the chance to see what a potential lender sees and uses to judge your credit worthiness. You want to make sure that your credit report is accurate before you apply for that sports car or new home. Errors or problems can be corrected before your lender can use those against you and deny your credit request. You'll also have a better idea of what type or rate of credit you should expect from a potential lender. Tip #5 - Check your credit report regularly Check your credit report regularly. Guard your "consumer identity" as you would anything else you treasure. Use your credit wisely, along with these tips, and you will enjoy the benefits that your good credit and your good name deserve now - and for years to come. © 2004, www.yourfreecreditreportnow.com">www.yourfreecreditreportnow.com
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Credit Reports Inside and Out The Credit Report is like your scorecard in the lending world. Every time you prepare yourself to acquire or purchase something that requires financial assistance from a lending institution, your credit report will be your "presentation card". Which Credit Bureau Should I Use To Check My Credit Report? There are three main credit bureaus in the United States; Equifax, Experian and Trans Union. Each bureau collects your personal and financial information which is then sold to lenders such as banks, credit unions, credit card companies, mortgage and auto loan lenders. What is a Bad Credit History? A bad credit history can sometimes seem like a curse.. First Major Regulatory and Legislative Victory of 2005 for Creditors and Consumers Under the Fair Debt Collection Practices Act, collectors are not allowed to disclose a consumers past due debt to anyone other than the debtor and in some cases a spouse. The Telephone Consumer Protection Act would have required collectors to identify the registered name of their business in any pre-recorded messages to consumers or debtors. Always Avoid Payment Holidays Once you've been paying off a credit card for a while, you might be offered a 'payment holiday'. You'll get a letter, saying that since the company knows it's difficult for some families around Christmas (or whatever other excuse they think up), they're offering you a month off from paying, as a 'special present'. Simple Identity Theft Protection How many of you bank, shop, or transact other business online? There are at least 4 million Department pf Defense employees that access their pay records online only. Even offline, stored financial data can be placed at risk in computers that are used on the Internet as well. Fixing A Credit Report Fixing a credit report starts with seeing what's on it. You may get access for free online. How Your Credit Rating Affects You, and How to Check It You might not know it, but every time you take out any kind of loan or credit or pay something back, it gets counted on your credit rating. Who keeps a record on you will vary according to where you live, but the big three credit reference agencies are Experian, Equifax and Trans Union. How did a Thief get my Name? Don't be a Victim of Identity Theft How do these people get my name? If you have a credit card, your name is sold to third parties, if you do not want this to happen, you must contact your credit card companies to inform them that you do not want your information sold. Check the privacy notice that comes with your bill. Boosting Your Credit Score To Get The Best Credit Card Deal Making Your Credit Rating Work For YouOne of the basics of getting the most competitive credit card deal in the market is to ensure you have the best credit record possible. Few of us are lucky enough to be earning a six-figure salary, and many people are likely to have other financial undertakings that a potential lender will want to take into account. A Debt Mentality While working through my own debt situation, and helping others resolve their life issues regarding debt and credit, it never ceases to amaze me how similar the life stories are and how profound is the effect of debt on the way a person thinks about life, irregardless of how much money they have or don't have.I remember being in junior high school hearing my father say something to the effect of "you only have as much money as you have credit. 3 Free Credit Reports For You If you were to tell someone that they can have a certain item for free, more than likely their response would be, "what's the catch?" In the case of credit reports there is no catch, you can now get a free copy of this report through the three credit reporting agencies: Equifax, TransUnions, and Experian. Let's take a look at the law and how you can benefit from it. Avoiding Credit Card Traps The next time you open your credit card statement, take a closer look at the small insert titled "changes to your credit card agreement". You know the one I'm speaking about. How A Prepaid Debit Card Can Help You Rebuild Your Credit Consumers today are up to their eyeballs in debt. And many people don't realize it until their good credit has been devastated. Fun with Credit Cards For those of us who know how to use them properly, credit cards can actually be quite fun and lucrative. To those who do not know how to use them properly, I would say that you should stop reading this column right about now, or at least I would advise you not to try any of this stuff at home. Harassment of People in Debt by Creditors HarassmentHarassment of people in debt by creditors or their agents is a criminal offence under the Administration of Justice Act 1970. It is often difficult to know what to do when you feel a creditor is not dealing with your account fairly. Credit Cards: Pros and Cons Sure, there are a lot of problems with credit cards, but there are a lot of good things attached to them as well. For instance, if you have a small business, fleet credit cards can keep your books in order when you issue them to drivers of company vehicles for gas and automobile repairs. Myths and Truth about Credit Scoring Credit score is the key factor determining approval of almost any type of credit. It is based on the information contained in your credit report files. Credit Trap: What They Dont Tell You About Credit Cards In College In industrialized nations, going into debt starts early. It's easy for an eighteen-year-old to get credit cards and fall into debt, especially if they're headed for college. New Law Provides Free Annual Credit Report As of Thursday, December 1, 2004, one-third of Americans will be able to access their credit reports from all three main agencies for free. Passed in late 2003, the Fair & Accurate Credit Transactions Act creates a central source consumers can use to obtain a free annual credit report.
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