Your credit is very important when it comes to determining mortgage eligibility and can be a factor in several other areas as well. Are you concerned about your credit rating? Just about everyone has something in their past credit that is less than perfect. The most important thing is to learn what is on your report, determine what impact that information has on your credit rating, and work on repairing any damage or correcting any misinformation that may exist on your report. There are three main credit bureaus to which most creditors such as credit card companies, banks and leasing agencies provide information.
· Equifax: 1-800-685-1111 or www.equifax.com
· Experian: 1-888-397-3742 or www.experian.com
· TransUnion: 1-800-916-8800 or www.transunion.com
Every time you apply for credit you’re allowing lenders to see your credit report. And other creditors with a qualified purpose — such as sending you a pre-approved credit card offer — can check your report without your permission. So shouldn't you see what they're seeing?
Be proactive and check your credit report on a regular basis. Not only will you be better prepared for negotiations with lenders, you can also get early warning signs of fraud.
When and how to get your report
You should review your credit report from the three major U.S. credit reporting agencies (Equifax, Experian, and TransUnion):
· At least once a year
· Especially before making a large purchase, like a house or a car
You can order credit reports from all three agencies at the same time from Fair Isaac Corporation.
Free credit reports
Credit agencies charge a small fee for reports. However, you are entitled to one free credit report from each of the three major credit agencies once a year. You must order your free credit reports through www.annualcreditreport.com.
In addition, you’re entitled to a free report:
· Within 60 days of being denied credit, insurance, or employment
· Once a year if you’re unemployed and plan to look for a job within 60 days
· If you’re on welfare
· If your report is inaccurate because of fraud, including identity theft
How to fix errors on your report
If you find an error, fill out the dispute form provided by the credit reporting agency. The credit reporting agency must investigate and respond to you within 30 days. You can get your credit report from many sources, but only the credit agencies can actually correct the data on your report. Contact the three major credit agencies directly:
· Equifax: 1-800-685-1111 or www.equifax.com
· Experian: 1-888-397-3742 or www.experian.com
· TransUnion: 1-800-916-8800 or www.transunion.com
If you are in the process of applying for a loan, immediately notify your lender of any incorrect information in your report. Your lender will need to reorder your credit report and score once any changes have been made to your information at the credit reporting agency. Fixing small errors may have little or no effect on your score, but correcting significant errors may have a much more meaningful impact.
How mistakes are made
When a credit report contains errors, it is often because the report is incomplete, or contains information about someone else. This typically happens because:
· The person applied for credit under different names (Robert Jones, Bob Jones, etc.).
· Someone made a clerical error in reading or entering name or address information from a hand-written application.
· The person gave an inaccurate Social Security number, or the lender misread the number.
· Loan or credit card payments were inadvertently applied to the wrong account.
Some incorrect data, however, is an indication that you have been the victim of fraud or identity theft (for example, someone has applied for credit in your name or used your credit without your permission). It's crucial that you catch these mistakes and take action to fix the data on your report.
Some Tips for Keeping Your Credit at it's Peak
Each month, your credit holders report information to the 3 credit bureaus about your current balance, minimum payment requirement, and payment history. Everyone wants to have great credit, but not everyone knows the best steps to take to help improve and maintain their credit. The following are some basic ways to assist your overall credit profile.
Pay your bills on time, especially mortgage or rent payments. Apart from extreme circumstances like bankruptcy or tax liens, nothing has as big of an impact on your credit history as late payments.
Don't max out available credit on credit card accounts. Your credit score may be affected based on the appearance that you are having trouble managing your finances.
Don't apply for too much credit in a short amount of time. Multiple requests for your credit history (not including requests by you to check your file) can affect your score.
Be neat and consistent when filling out credit applications. This will ensure that all of your information is recorded in a single file, as opposed to multiple files or, worse, someone else's file.
Periodically check your credit history for errors. Be aware of your credit history. Know where you've opened credit in the past, and if you've applied for anything recently. If creditors you are unfamiliar with are reporting on your credit report, be sure to address these as they may be potential errors.
Please let us know if you'd be interested in a credit review opportunity! Please Contact Phil White 480-430-3080
