Credit Bureau - Obtain a Free Credit Report

The Eye

FREE CREDIT REPORT:
Equifax; Experian; Transunion


Starting December 1, 2004 the Fair Credit Reporting Act allows you to get one free comprehensive disclosure of all of the information in your credit file from each of the three major credit bureaus once per year.

Credit Bureaus - What they Do.

Credit reporting agencies or credit bureaus, collect information about consumers' financial affairs and sell that information to their business members, such as credit grantors, employers and insurance companies. The credit bureaus charge annual fees as well as a fee for each credit report requested by members.

In the US, there are three main credit bureaus: Equifax Experian and TransUnion.

Most national and international creditors, such as banks and department stores, are registered with all three bureaus, so the chances are good that whatever shows up on one credit report will also appear on the others. This makes it simple for you to check your history. You really need to check only one bureau's records.

Credit Bureaus - How they get their Information.

Credit bureaus obtain their information from three major sources:

1. Consumers supply information, primarily from filling out application forms for credit.

2. Public records provide information on such matters as bankruptcies, Court judgments, foreclosures and agreements registered.

3. The major credit grantors and collection agencies regularly send their credit files electronically to the credit bureaus, resulting in files that include the account number, outstanding balance, and a nine point scale indicating whether a payment was made on time or late.

Credit Bureaus - What the Points Mean.

The nine point scale is as follows:

0 Too new to rate; approved but not used.

1 Pays (or paid) within 30 days of billing; pays account as agreed.

2 Pays (or paid) in more than 30 days, but not more than 60 days, or one payment past due.

3 Pays (or paid) in more than 60 days, but not more than 90 days, or two payments past due.

4 Pays (or paid) in more than 90 days, but not more than 120 days, or three or more payments past due.

5 Account is at least 120 days overdue, but is not yet rated 9.

6 (Code 6 does not exist.)

7 Making regular payments under a consolidation order or similar arrangement.

8 Repossession (indicate if it is a voluntary return of merchandise by the consumer).

9 Bad debt; placed for collection; skip.

The FICO® score

The FICO® score, developed by Fair, Isaac (the pioneer in credit scoring) is a number between 300 and 850 that lenders use to determine your credit rating. A FICO® score is a snapshot of your credit rating at a particular point in time. The higher your credit score the more likely you are to be approved for loans and receive favorable rates.

More than 70% of the 100 largest financial institutions use FICO® scores to make billions of credit decisions each year, including more than 75 percent of mortgage loan originations.

Credit Bureaus - Some Words of Advice.

Checking Your Credit Report:
Checking your credit report If you are applying for a loan or credit, is vital. This report is often a critical factor in credit scoring systems that lenders use to issue credit cards as well as mortgages or other loans.

If you find problems, or if potential creditors discover them, you can take steps to rebuild damaged credit and clean up that record. If you've made mistakes in paying previous loans, bounced checks, made late payments or had other problems, you may still be able to reduce the amount of damage they will do to your credit with explanations or some basic repair.

How To Get a Copy of Your Credit Report
You can simply request a copy from one of the three major national credit bureaus:Equifax, Experian and TransUnion.

If you applied for a loan and were turned down, you are entitled to a free copy of your credit report, but you must request a copy by writing the correct credit bureau within 30 days of the rejection. Include a copy of the declined loan application.

You can also get a free report if you are unemployed, planning to apply for jobs in the next 60 days, receiving public welfare assistance or believe the credit file contains mistakes resulting from fraud.

Check Your Credit Report Before you Apply for a Loan
Check your report if you are about to apply for a major loan, like a house or car. Give yourself time to correct mistakes or make good on delinquent accounts.

For a home, you should check your credit at least three to six months before you apply for a mortgage. For an auto loan, check your credit (and arrange financing with your bank or credit union) before you start shopping. For credit cards, check your report before you apply.

Correcting Errors on Your Credit Report
Make sure the following information is correct: Your name; or names if you are or were married; Social security number; Date of birth; addresses of places you've lived; names of places you've worked; pending accounts and accounts that have been closed

Ensure that nothing has been on the report longer than is allowed by law:

Suits and judgments, tax liens, arrest records, and most other kinds of unfavorable information must be dropped after 7 years.

BankruptcyAction.com Tip

You are entitled to place an explanation on the credit bureau report giving your side of any disputed item or other explanation.

Any error that you find must be investigated by the credit bureau with the creditor who supplied the data. The bureau will remove from your credit report any errors a creditor admits are there. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.

The Fair Credit Billing Act requires creditors to correct errors promptly and without damage to your credit rating. The law defines a billing error as any charge for something you didn't buy or for a purchase made by someone not authorized to use your account; for something that is not properly identified on your bill or is for an amount different from the actual purchase price or was entered on a date different from the purchase date; for something that you did not accept on delivery or that was not delivered according to agreement.

Billing errors also include: errors in arithmetic; failure to show a payment or other credit to your account; failure to mail the bill to your current address, if you told the creditor about an address change at least 20 days before the end of the billing period; questionable items, or any item for which you need more information.

Once you have written about a possible error, a creditor must not give out information to other creditors or credit bureaus that would hurt your credit reputation until the matter is resolved. Until your complaint is answered, the creditor may not take any action to collect the disputed amount.

February 16 '04

Federal Appeals Court rules Credit Card Company must must investigate a consumer complaint . - MBNA to pay damages of $90,000.

Caution
Be careful when applying for credit. When the companies you apply to check your report they can find out who else has been checking your report and determine what, when and how you have been applying for credit. That means if you have been getting turned down and are desperately applying for credit all over town your potential creditors will know.

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