Often we come across the term Credit Report in several of our financial transactions. Sometimes we even have to face some problems regarding this important piece of document. But how important a credit report really is? And what is a credit report at the first place? Very few of us have the clear idea about ‘Credit Report’ and the huge importance it holds up for us in all our financial transactions. So, let us now see what is this all about and how you can snatch the maximum benefits out of your Credit Report.
To put it in simple words, there is actually no fuss regarding what ‘Credit Report’ stands for. It is simply the summation of credit and report just like any other report cards related to any other aspects of life and activities. A medical report, for instance, records the details of the ailments or physical condition that you went to get treatment for. This makes it clear that the shift should be on the details included in a Credit Report rather than on the term. Once you get hold of the simple idea of what a Credit Report includes, you know half the tricks regarding how to control it and what to expect of it.
Now, as the term goes, a credit report is a recording document where all the details of your financial transactions are enlisted. Starting from the accounts that you have opened, the regular transactions that you may have made on them, the loans that you may have taken, to personal information like where you live, your social security number, the organization you work with and even if there is any bankruptcy reported on you, everything is included here. In fact, a Credit Report is a mirror of your financial situation. This is also a ticket for you to get better loans and less interest on them. Maintaining a good credit report is in fact a mandatory part of your financial activities. Now, the question may arise, who prepares this Credit Report and how they collect data about you? Your credit report is prepared by any or all of the three major credit bureaus – Equifax, Experian and TransUnion. When you fill up any form for loan or any credit card application, your personal data is collected and is recorded in the form of a Credit Report.
Here are the details of the information that are furnished in your Credit Report. Have a look:
- What do you expect in your Credit Report at the first place? Obviously it has to be the details of your financial transactions and yes, that is what, is included in any Credit Report. This furnishes all the details of your accounts whether open or closed. In case the accounts are open, the Credit Report will show when the account was opened, the mode of payment you have opted for, your regularity in making the payments, the credit limit and the balance, loan amount and even whether you are making the payments or any cosigner – all are reflected in the Credit Report.
- But a Credit Report is not only about the details of your credit, it also reflects much of the information that is recorded in the public records. These also have direct bearing to your financial status. For instance, a Credit Report includes information about bankruptcy, tax liens, any overdue regarding child support etc. Even inquiries are also a vital part of the Credit Report. You can incite an inquiry by applying for credit cards and in turn the lenders will get information about you. All these are recorded in your Credit Report and too many inquiries can be a negative point in your Credit Report.
- Apart from this financial information, a credit report also includes many of your personal information that identifies you. Your name, date of birth, your spouse’s name, present and previous address, present and previous employer, social security and telephone number – all are included in the Credit Report. However, some personal information is never asked for which include, your religion, lifestyle, race, political preferences, criminal records and some other.
Now, you have a basic idea of what a Credit Report is and what it reflects. But the main question remains still – how it helps you? Well, from the above discussion it is clear that whatever you do on the financial front or how you manage your finances, gets reflected in your Credit Report. Now the simple equation is, a good finance management is equal to a good Credit Report and vice versa. This triggers the positive or negative responses from the lenders when you go for a loan or apply for a new credit card. The potential lenders or credit card issuers will go through your Credit Report to find out whether you can be relied on with time payments or not, and will grant you the loan subsequently. The rate of interest also depends on the fairness of your Credit Report. If the report shows that you are capable of making timely payments, your interest rate may be lower and the opposite may also happen – all depending on the report.
In the present financial scenario of the nation, maintaining a Credit Report with fair accuracy has become an integral part of economic well being. Apart from the ample benefits that you get out of it, you can also steer clear of the threatening identity theft crimes at the same time. So, gear up, read on with us and know all that you need to know about Credit Reports and its maintenance.
How To Get A Credit Report?
The importance of Credit Report and the benefits you can obtain from it have been made clear. Now the next big question is, how to get a Credit Report where you can check by yourself what has been included, whether the information given there are presented correctly or not and can also check out if any improper transactions are reported on your name or not. There is in fact a legal way to get your Credit Report and that too for free. In the year 2003, under the Fair and Accurate Credit Transactions Act, which was passed by Congress, you are entitled for free credit report yearly from all the three major credit bureaus – TransUnion, Experian and Equifax.
All you need to do is to visit the specific site for these credit bureaus and register for the free copy of your Credit Report. You can register for all the three bureaus in which case you have to register three times separately. The site where you can register is: www.AnnualCreditReport.com. There are two other options as well. You can directly call and place your request through the toll free number 877-322-8228. You can also avail the form for the free Credit Reports on the back of “Annual Credit Report Request” brochure which you can get from the FTC. After filling this form, you can mail to the address: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. In all three cases, you will be asked to impart some information about yourself like, your name, address, social security number and some more detail oriented questions which only you can answer. This will authenticate your registration making you entitled for receiving the free copy of your Credit Report annually. You can even set the time in which case you can receive three Credit Reports at three different times of the year.
There are some other conditions as well, where you will get a Free Credit Report as well. These include situations when you are looking for a job within 60 days and need your Credit Report to be shown, or if you live in any of these places like Maine, Maryland, New Jersey, Georgia, Colorado or Vermont. There are certain other criteria as well under which you can receive a free copy of your Credit Report. You can even purchase a copy of your Credit Report from the credit bureaus. Their numbers are as follows:
| Equifax: 1-800-685-1111 | TransUnion: 1-800-916-8800 | Experian: 1-888-397-3742 |
However, you should be very careful not to disclose your personal information to the fraudulent organizations that lure you with the advertisements of offering you free Credit Reports with additional benefits. In fact, in these cases you end up paying for the service which you are getting for free. Moreover, you should always get the report from the centralized sources. This will keep your personal information secure. So, place your request today for a free copy of your Credit Report and manage your finances in a better way.
Understanding Your Credit Report
Once you know what a Credit Report is and why you need it, the next step will no doubt be getting it from the credit reporting agencies. But the main task or rather the hardest part comes after that. How do you feel after you have the first glance at your Credit Report? Anyone can bet on the reaction that it would be anything but a pleasant feel, right? It almost looks like a scary maze of numbers and figures that you need some special gift to decipher. But when TopCreditCrads.com is by your side, reading and understanding your Credit Report is just like reading any other report cards. So here is what you need to do.
The first step that you should take towards understanding your Credit Report is to banish the thought of the report being a difficult one. There are certain ways following which you can get a comprehensive idea about where you stand regarding your credit and financial situation. A Credit Report has specific sections for specific information. Once you understand what to look for in those sections, you can take it for crossing half the hurdles. There will be sections for your personal information, credit history, public records and inquiry. Each section contains certain information and facts about your financial transactions which make the complete report.
In the first section that is for your personal identifying information, you will find your name, postal address; change of address if any, phone number, social security number and even in some credit reports, the name of your spouse is also there. You may find out some mistakes in the information, like wrong spelling and all; but these hardly matter as the creditor will look for the main credit information only.
The next section, that is the credit section, is the most important part of the whole report. In this section all your financial transactions are recorded with minute details. The main thing which you will find here is the list of account numbers against the creditors. There can be more than one account number for one creditor. The type of account number is also mentioned; like whether it is a car loan, mortgage, installment account etc. The status of the account is given; whether it is open, paid, or closed – all these are recorded in the Credit Report. Even the date of opening the account is also mentioned. Other things that are recorded include, the amount of the loan, how much is paid, minimum payment or the amount if it is a fixed payment, whether the account is solely on your name or is there any other cosigner. Some Credit Reports also mention in a simple way, whether you pay on time or get late in your payment. It even shows the time limit by which you make the late payment. Experian Credit Report is one such.
So, these are the parts of this section which you will get in a credit report. Once you get this, you need to go through it again and again to make sure the information given there is not wrong. Once you are done with the credit section, next comes the public record section. This section includes the records regarding late payments in tax, if there is any judgment on you, bankruptcies and negative aspects like these. That is why any listing in the public record section of your Credit Report is bad for the ultimate credit score.
After this section, comes the inquiry part. This is again another valuable section in the Credit Report. You will get quite a listing here. This is because, every time you apply for a credit card or loan, or ask for getting the Credit Report – all are listed here. On the other hand, every time a creditor has asked for your Credit Report that is also listed here. These inquiries are divided into hard and soft groups. Hard inquiries are those made on your part for getting a credit card or loan. If you inquire too frequently and get rejected, that will be negative for your credit score. On the other hand, if you are prequalified for any loan or credit card and the creditor ask for your credit report that will be included in the soft inquiry and has no bearings on your Credit Report and score.
Now you have got the ways to approach to your Credit Report and understand it. But most of the Credit Reports have some or other kind of mistakes. That is why you should always read it thoroughly to see if any wrong information is there or not. This will also ensure that you can steer clear of the identity theft crimes and fall a victim to that.
Things To Look For
Once you get the Credit Report from all the three credit bureaus, you should go through them again and again, scrutinizing whether the information mentioned there is correct or presented wrongly. This is because, it has been seen that most of the times some information placed in the report are wrong. That is why you should know which points to look for in your Credit Report specifically. As you already know, there are in total four sections in a credit report that include personal information section, credit Information section, public record section and the inquiry section. Now, in each section again, you need to be careful about certain points. Let us see now what these points are and how you can keep a check on the mistakes done in these sections.
Personal Information: There can be a number of mistakes in this section. It can often happen that due to a simple mistake in the spelling of the name, you will end up paying for other’s Credit Report. Therefore, be very careful and check in detail whether the names, address, postal code, social security number, phone number, your past and present employer’s name, date of birth, marital status – everything is correct or not. This will ensure that identifying information is correct and will keep a check on the identity thefts.
Credit Information: This is the most important section of a Credit Report and therefore calls for even more strict scrutiny. Go through every single point mentioned there again and again and make sure they are all correct. Look for accounts which are closed and yet are reported to be active. This can be a work of the scammers. Moreover, there can be data of financial transactions on your name which you have never incurred. Look out also for debt and late payments related information and in case you have any doubt, clear them as soon as possible.
Public Record Information: This is rather a touchy section. No one will wish to see any listings in this section. And yet, if unfortunately there is any information listed in public record section, make sure that they are all correct and are yours. Check out the tax lien, late payments, bankruptcy details so that even though they are yours, the information is not placed wrong there.
Inquiry Information: Though hard, still try to make sure every inquiry detail mentioned in the Credit Report is right. Go through both the hard and soft inquiries with same attention and find out if all are correct. There can be someone else’s data placed in your report and you should be careful about it.
A survey done on the Credit Reports in 2004 has yielded the result that almost 79% of the reports have mistakes on them. Therefore, be very careful while going through the Credit Report and mark out if any mistake are there to change them properly. If there is no mistake, time to enjoy. On the other hand, if you find some, time for a little bit of tedious work again. You need to report it to the credit bureau from where you have got the report and also the creditor to correct the error and replace it with the proper one.
Rectification Of Errors
Finding faults and mistakes in the Credit Report is almost common. But then when it really happens, no doubt it will get on your nerves until you are getting the right information and facts furnished in the report rectifying the wrong ones. Now you must be wondering what will be the right procedure to do that. Well, here we have furnished the steps that you need to follow:
- The basic step for rectifying the errors in your Credit Report is to inform both the creditors and the credit bureaus about the mistakes placed in your Credit Report.
- Consumers also has a legal right now, under the FACT Act to dispute any information which they think is presented falsely on their Credit Report. Due to this law, you can now directly dispute over any misrepresentations of financial information with both the credit bureaus and the creditors.
- Now there are certain procedures which you should follow when you are reporting a dispute to the credit reporting agency. First of all, you need to send a written statement pointing which of the information is incorrect and the reason behind it. Then ask for the removal of the improper information. You have to attach copies of substantiating documents also with the letter. A copy of the Credit Report should also be attached with the written statement. Be also ready with the proof documents about the creditor who has provided the wrong information. The letter with the attachments should be sent through certified mail. Never forget to ask for a return receipt of the mail and also keep a copy of the letter and the attachments that you are sending to the credit bureaus.
- The same you should do in informing the creditors. You should mention about the wrong information, why you dispute it, the proofs supporting your statements. Attaching the copies of the documents, send them by mail to the creditor. This you should do to stop the reoccurrence of the false information again in the Credit Report.
- Once the credit bureau is informed, they have 30-45 days of time to investigate into the matter, notify the creditor about the dispute and rectify the improper information. Then the creditor also has to inform other credit reporting agencies about the dispute and correct the piece of information from recurring in your next Credit Report. Once the investigation is done and the improper information is removed, the consumer is notified in writing and is given a free copy of the Credit Report.
- The next step that you should take is to check with all the three credit bureaus to see whether the rectification is done properly or not. The whole issue may take time and you should have enough patience to see that the problem is resolved.
Gaining Access To Credit Report
Your Credit Report is a very confidential document and every one cannot have access there. This is because, the Credit Report contains your personal identification information and financial information which can easily victimize you in case they get into the wrong hands. But apart from you, some other entities have access to your Credit Report. Let us know about this.
Whenever you apply for any loan, credit cards, and mortgage or even inquire about these, your Credit Report is viewed by the concerned authority to determine your financial stability. Even some employers and landlords may also ask for your Credit Report to know whether you are financially credible or not. As a Credit Report is almost like a mirror to your financial state, it serves as a vital proof to your own money management.
Now every time you apply for a loan, the lender will pull out your Credit Report. They will check your credit information, public record in case there is any and also the inquiries to determine if you are at all loan worthy and if so then how much you can get and at how much interest. In case your Credit Report establishes you to be good at making timely payment, the lender may consider high amount of loan at low interest rate for you. On the contrary, a not-so-strong Credit Report may draw the opposite result for you.
Same goes for the credit card issuers. A good Credit Report will assure them of timely payments where as a medium or bad Credit Report may lead to the denial of credit cards for you. Be sure that, whenever your application for credit card will be processed, the issuer will go through your Credit Report. This means, when you got those pre-approved credit cards, they have not gone through your Credit Report, and the low interest rate that they are offering at present may change depending on your Credit Report when they go through it.
Other organizations or authorities that can view your Credit Report legally are the utility companies when they are giving connections for certain utilities like water, phone, electricity, internet connections etc. Moreover, your landlord and prospective employers can also have a look at your Credit Report before they keep you to ensure that you are financially trustworthy. Even the insurance companies, collection agencies, court and child support agencies can also view your Credit Report for the concerned purposes.
Opting Out
It is legal from the end of the Credit reporting agencies to sell your information both personal and related to credit, to the entities mentioned above. However, the use of this information for direct marketing purposes is not permissible. You even have a right to opt-out from the list to stop your personal information being sold to other organization.
All you need to do in this regard is to contact the three major credit bureaus about your preference and opt out from the list to stop receiving pre-approved credit cards and other services. You can even opt-out through the toll free number of credit report agencies which all of them maintain specifically for this purpose. The opt-out number is (888)-5-OPTOUT or (888)-567-8688. You can also write to these agencies for availing the same services at the mailing address mentioned before.
To contact the other financial service providers and to get the instructions regarding how to opt out, you can also check out the privacy notices which you receive annually from your bank and also the credit card company. Using the postal address or email id, you can notify these organizations about your preferences for opting out.
The sale of credit header has been stopped in the year 2002 before which the issue created much problems. The Federal appeal court has taken active stance in stopping this sale of private financial information for direct marketing following the law of Gramm-Leach-Bliley Act. Now you can opt for more security for protecting your personal information by this option of opting out and steer clear of the identity scammers more effectively.
Check Credit Report Regularly
Credit Report is a very important document that has direct impact on the well being of your financial condition. A regular check of this report can bring forth a number of aspects which may have affect on your credit score as well. Moreover, this is almost like a ticket for you to get a good loan or a credit card. Keeping a regular check on your Credit Report is a healthy practice that ensures financial security from various aspects. Let us consider them here one by one:
- Inquires are often made either hard or soft and they can have impact on your Credit Report and resultantly on your credit score. A regular check keeps you aware of this aspect.
- Financial transactions on your account, any new account opening, loans or credit cards that you may have taken, all are recorded in the credit section of the Credit Report. You should check this regularly so that you can stay aware that no one has opened any account on your name or is doing transactions on old accounts.
- In case you have changed address this should also be reflected in your Credit Report. A regular check will help you to correct any inaccuracies in personal information which is also very important.
- Credit Score is very much dependant on your Credit Report. This score can drop as a result of any negative marks in your credit report. That is why if you make it a habit of checking your credit reports regularly, this will do much good to your financial well being.
A great help that you mostly get from checking your Credit Report is, to keep those identity scammers at a bay. At, a time when identity theft is rising, this is really a good weapon to fight back.
Miscellaneous Info
Now you have almost all the information you need to crack the muffled and puzzling figures of your Credit Report. Here are some more which no doubt, will prove to be handy in case you feel the sudden need for them. We have listed here some consumer and government organizations, that you will need in case you are trying to find solution. Check them out:
Consumer Organizations
- Consumers Union, www.consumersunion.org and www.financialprivacynow.org
- Consumer Action, www.consumer-action.org
- Privacy Rights Clearinghouse, www.privacyrights.org
- Consumer Federation of America, www.consumerfed.org
- U.S. Public Interest Research Group (USPIRG), www.pirg.org
Government Organizations
- Federal Deposit Insurance Corporation, (202) 393-8400, www.fdic.gov
- U. S. Comptroller of the Currency, (800) 613-6743, www.occ.treas.gov
- Federal Reserve Board, (202) 452-3693, www.federalreserve.gov
In any dispute regarding improper information placed in your Credit Report, you can take the issue further, with the three major credit bureaus and also the concerned creditors. The law that gives you this permission is, Fair Credit Reporting Act. You can check out the advocates for your purpose at the below mentioned sites for more assistance.
- National Association of Consumer Advocates, www.naca.net
- My Fair Credit attorney listing, www.myfaircredit.com
So, now you are thoroughly equipped with all the information you need to know regarding Credit Report, its functions in your finances and how you can manage them better with the help of Credit Reports. Use your judgment wisely in resolving disputes if there is any and make your way to build up a nice credit history to see you through tough financial situations.
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