Accurate Credit Report Does You Good/ December 26th, 2011
Haven't reviewed your free annual credit reports yet? You might find out you should have at the most inopportune moment—when you try to get a loan, sign up for utility service, or even apply for a job. Credit reports provide a very personal look into your financial world. They contain information about where you live, where you have worked, how much money you owe, if you pay your bills on time, and whether you have filed for bankruptcy. The information can bolster your credit standing or undermine it. This information is collected and updated regularly by the three nationwide consumer reporting agencies: Experian, TransUnion, and Equifax. Independent credit score developers such as Fair Isaac Company, VantageScore, and LLC develop proprietary scores that lenders use to assess the information in credit reports. The consumer reporting companies sell that information to creditors, insurers, and other businesses that have a valid need. Those businesses want to evaluate your applications for such things as insurance, credit, or renting a home. If you don't review and correct problems on your credit reports, businesses that receive them will make their judgments about you based on wrong or incomplete information. When the people you're dealing with tell you what they've based their decision on, you can respond that there has been a mistake. That, yes, it will be corrected. But are you, and will they be, prepared to wait? The National Foundation for Credit Counseling (NFCC), Washington, D.C., in its annual Financial Literacy Survey, found that 65% of respondents had not ordered their report in the past 12 months. Asked why not, 43% said they didn't think it would be useful to them. Another 43% indicated they didn't because they don't plan to apply for new loans or credit. "Obtaining your report and understanding its contents are basic building blocks of financial stability, so it is discouraging to know that so many have not taken advantage of this free resource," says Gail Cunningham, vice president of membership and public relations at NFCC. Review your annual reports and ensure that your credit is worthy. Here's how:
You can obtain one free credit report every 12 months from each of the three nationwide consumer reporting companies.
Get your free annual credit reportsAs provided for by the federal Fair Credit Reporting Act, you can obtain one free report every 12 months from each of the three nationwide consumer reporting companies. Stagger the reports every four months in rotation so you can keep tabs throughout the year. Only one website has been officially authorized to provide credit reports: AnnualCreditReport.com. You also can call 877-322-8228, or complete a request form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You'll need your name, address, Social Security number (SSN), and date of birth, and you may need to provide some details to verify that it's you making the request.
Check the basics firstAre your name, SSN, birth date, and address correct? Rod Griffin, Allen, Texas, director of public education at Experian, notes that the three things he's most asked about as errors are not errors at all: variations in name, SSN, and address. "Experian lists all name spellings and variations, Social Security number variations, and address variations reported to it by businesses," says Griffin. "We do so to ensure the consumer has a full account of the identifying information reported to us by lenders. Doing so enables the consumer to identify indicators of fraud or identity theft and to subsequently act on it. If Experian were to omit those variations, it may prevent a consumer from being alerted to fraud. "In most instances, however, the variations are simply the result of a person using a nickname to apply for credit or other services—'Robert' on one application but 'Bob' on another, for example, or a typographical error such as a transposed digit in an address," Griffin says. These issues do not affect a person's credit scores or lending decisions.
Verify the information for each mortgage, loan, credit cardSome of it can get complicated. If a loan is sold, the lender listed may not be the same as the original. Check outstanding balances, credit limits, dates when the credit was obtained, and whether accounts were closed and who closed them. Look at unfavorable information such as late payments or collection accounts and make sure the data are correct.
Contact the company that has provided the incorrect information as well as the credit reporting agency.