|11 things you never knew about your
Using a company that promises credit reports as a
perk can turn this myth into a self-fulfilling prophecy, however,
McNaughton says. Because they are merchants in disguise, their freebie
costs you. Citizens must go directly to the three bureaus if they
want a soft pull. Ditto FICO.
"Pulling your credit scores
is quite empowering," says Watts. "You have a choice:
you can either be very aggressive with your credit management and
pull your score with some regularity or take a more passive approach
once a year to see how all those credit cards are actually doing."
6. FICO scores are locked in
for six months.
Fair Isaac Corporation's models are dynamic,
meaning that your FICO score changes as soon as data on your credit
"When we calculate a score, for all intents
and purposes it then goes away and is recalculated the next time
someone pulls your file," says Watts.
7. I don't need to check my credit
report if I pay my bills on time.
the Consumer Federation of America and the National Credit Reporting Association
analyzed credit scores in the summer of 2002, they discovered that 78 percent
of the files were missing a revolving account in good standing, while 33 percent
of files lacked a mortgage account that had never been late. Twenty-nine percent
contained conflicting information on how many times the consumer had been 60 days
late on payments.
"There can be a lot of other
activity going on that you don't have any clue about," McNaughton notes.
In her experience, 80 percent of all credit reports
have erroneous information ranging from a wrong birth date to accounts you never
8. All credit reports are the same.
Way wrong. These days, most creditors across
the country do report their information to all three major agencies: TransUnion,
Equifax and Experian.
But "That was not true
in the past," Sweet admits.
And, because they are separate
companies, the speed in which they update records isn't necessarily equal.
the agencies use inquiry activity to update your address, phone numbers, employment
status and the like. Because creditors typically pull only one company's report,
it's possible that, say, TransUnion doesn't show your current address.
to McNaughton, she's never seen a client yet for whom all three reports spit out
the same records and scoring.
9. A divorce decree automatically severs joint
judge may have rubber-stamped your plans to divide credit card, car and house
payments, but that carries absolutely no legal weight with the creditors themselves,
"We see so many people who, a year
or two after the divorce, are just outraged and hurt because their credit report
reflects their ex-spouse's missed payments," she says.
at that point, they are helpless to erase the damage.
parties must contact the creditors and either close current accounts or have the
booted name sign a letter of consent for this action. And assuming certain debts
isn't a unilateral decision on your part, notes Sweet. Creditors typically do
a credit check on your name, and if they don't deem you financially stable enough
to assume that $30,000 car loan, for instance, they won't agree to remove the