If you are applying for a loan or credit, records of your previous dealings with someone else’s money are vital.
Whether you get that mortgage or credit card, or not, may depend on a network of credit reporting agencies that either share information with, or are owned by, three major credit bureaus. 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.
So, if you’re considering making a major financial move it’s a good idea to check your credit report to know where you stand. That way you can be aware of, and if necessary take care of, problems before they jump up and derail your plans.
If you find problems, or if potential creditors discover them, 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.
Getting your hands on your credit report
The reports will not automatically be sent out. Each consumer must request their reports one of these three ways. Go to www.annualcreditreport.com, which is the only authorized source for consumers to access their annual credit report online for free. Or, call 877-322-8228. Lastly, you may complete the form on the back of the Annual Credit Report Request brochure, and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281. One more caveat: you’ll be able to order all three credit reports at one time, or at different times throughout the year. It’s your choice. But, be sure to order from the centralized agency. If you go directly to the credit reporting agencies, you will be charged unless you fit another criteria for a free report.
The new ruling doesn’t replace the other ways to receive a free credit report. First, if you applied for a loan and were turned down, you can request a copy by writing the correct credit bureau within 30 days of the rejection. With your request, you should include a copy of the declined loan application.
Secondly, 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.
Lastly, if you currently reside in a state that already offers a free annual credit report from each credit reporting agency (Colorado, Maine, Massachusetts, Maryland, New Jersey and Vermont.) Georgia residents are entitled to two free annual credit reports from each credit reporting agency.
To buy your credit reports, request a copy from each of the three credit bureaus: Equifax, Experian and TransUnion. Checking your credit can cost you as much as $9.95 per report, although it differs from state to state. You can order by phone, at the agencies’ Web sites or in writing. If you write, your letter needs to include your full name, date of birth, current and former address, Social Security number, your spouse’s name and your phone number. Each person requesting the report should sign the request.
Time it, then check the details
Once you get the report, you should make sure the following information is correct:
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:
Billing errors also include:
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. And, until your complaint is answered, the creditor also may not take any action to collect the disputed amount.
The law is on your side
You may also sue any credit-reporting agency or creditor for breaking the rules about who may see your credit records or for not correcting errors in your file.
A person who obtains a credit report without proper authorization — or an employee of a credit reporting agency who gives a credit report to unauthorized persons — may be fined up to $5,000 or imprisoned for one year, or both.
But a lot of people can see that report – including everyone to whom you have applied for a loan or credit. So be careful when applying for credit. You can even request that the credit bureaus remove your personal information from marketing lists.
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.
|— Updated: Sept. 2, 2005|