Credit Reporting

Your credit is the be all and end all to your existence, if you're ever going to expect anyone to loan you money.   Most of us have that need so it's important to keep up with it and know what's on your credit. 

Three major credit reporting agencies exist: 

• TransUnion
• Experian
• Equifax

At each of their websites, you can order a copy of your credit report and your credit score, also known as your FICO score.

Your credit report may show any of the following:

• Your creditors
• Joint Accountholders (e.g. spouse)
• The length of your credit history
• Payment History
• Bankruptcies, liens, judgments, garnishments, foreclosures, etc.
• Credit limits
• Highest amount owed
• Current amount owed
• Employment History
• Residence History
• Phone number
• Social Security Number
• Date of Birth
• Companies that requested a copy of your credit history

Your FICO score is a score that assesses the credit risk of loaning you money.  It's based on your history with credit.  Somewhere hidden far away from the public eye is a mystery equation used to figure out your credit score.  Equifax has a good FAQ on FICO scores and it's definitely worth taking a look.  Keep in mind that all three of your credit reports may be different.  Some creditors only report information to one and some report to all three.  Since there is different information on all of them, your FICO score may vary by reporting agency. 

Suggestions for Making Your Credit Report Your Friend

• The Devil You Know is Better than the Devil You Don't.
  • Obtain a copy of each of the three major credit reports annually.  It's so much better to find out what's on your credit report now than to wait until your trying to buy a home or a new car and you get turned down because your credit stinks or is just simply incorrect.
• Once you know the Devil, figure out what he thinks he knows.
  • You are going to see tons of strange things on your credit reports.  Don't be afraid.  You need to just go through it and figure out what's correct and not correct.
• Make Corrections.
  • Each credit reporting agency will allow you anywhere between 30 and 90 days to dispute anything that's incorrect or out of date on your report.  Take advantage of this time and don't forget about it!
• Follow Through.
  • Once you've submitted all of your disputes, you should expect to hear back on each and every dispute within a couple months.  With each dispute submitted, the credit reporting agency contacts the creditor and the creditor has 30 days to respond with proof substantiating what they claimed on your report.  If no word from the creditor is obtained, then the credit reporting agency will either update your report with what you submitted to them or remove it from the report entirely.  This is what a lot of the "We'll Fix Your Credit for a Fee" signs on the side of the roads are about.  It's pretty simple and it's something you can do yourself.  Why pay someone else to do it for you?
• Keep up with It!
  • If you go through your credit report yearly, you'll find it's not as much work as it was the first time.  You won't have as far back to go with creditors and you'll know what creditors are trying to screw you.

So... How do I do all this?

Well, first thing's first.  You need to get a copy of your credit reports.

Ways to Get Your Report:

    Equifax:

• Internet
  • www.equifax.com
• Mail
  • Equifax Information Services LLC
    P.O. Box 740241
    Atlanta, GA 30374
• Phone
  • (800) 685-1111
• Cost (*See Exceptions)
  • Credit Report and Equifax Score Power - $14.95
  • 3-in-1 credit report with Equifax Score Power - $39.95
  • 3-in-1 credit report with 3 Score Power Reports + 1 free - $44.95

    Experian:

• Internet
  • www.experian.com
• Mail
  • P.O. Box 2002
    Allen, TX 75013
• Phone
  • 1 888 397 3742
• Cost (*See Exceptions)
  • Credit Report Only - $9
  • Report & FICO Score - $14.95
  • 3-in-1 credit report with Experian score - $34.95

    TransUnion:

•  Internet
  •    www.transunion.com
• Mail
  • P.O. Box 1000
    Chester, PA 19022
• Phone
  • 1-800-888-4213
• Cost (* See Exceptions)
  • Credit Report & Score - $12.95
  • 3-in-1 credit report with 3 credit scores - $39.95
  • 3-in-1 credit report with TransUnion score - $29.95

Cost Exceptions

You are eligible for a reduced rate for your credit report.  Check the chart below for states and costs.

You are eligible for one free credit report a year if you live in:

• Colorado
• Maryland
• Massachusetts
• New Jersey
• Vermont

You are eligible for two free credit reports a year if you live in:

• Georgia

Fair Credit Reporting Act - You have rights!

• You are entitled to a free copy of your credit report if any of the following apply:
  • You were denied credit, housing, employment or insurance based on any information provided by a credit reporting agency.  You should be given a written notice about this denial, what agency provided the information and how to contact the agency to receive your free report.
  • You are unemployed and plan to see employment within 60 days.
  • Your report is inaccurate due to fraud.
  • You are on welfare.
  • You live in one of the states mentioned in the Cost Exceptions list.
• You have the right to dispute inaccurate information.
• You have the right to have inaccurate information removed from your report. (Dispute, dispute, dispute!!)
• You have tons of other rights that are outlined on the Federal Trade Commission's website.  I'd need to create another website just to discuss the details of the FCRA if I wanted to itemize everything for you, but fortunately I don't have to.  The Federal Trade Commission has created a pretty comprehensive list of official rules and regulations.  Check out their site for the official scoop on it.  http://www.ftc.gov/os/statutes/fcrajump.htm.

So I have my reports.  Now what?

You need to look over each and every item on these reports and identify them. 

• Verify personal information, like name, social security #s, addresses, etc.
• Color code your report.  This is the easiest way to sort through it all. 
  • Good to Go - Highlight the creditors that you know are correct, verifying account #s and payment history.  Use one color for items that you know are true and correct.
  • Follow Up - Select another color and highlight things that you are unsure of and need to verify.  If you see an old account on there you don't use any longer, highlight it in this 'Follow Up' color and call them.  If you don't use this account or creditor any longer, make sure you close the account with the creditor and ask for a letter verifying it was closed.   Include unknown accounts in here.  If you don't know an account, you need to call the creditor and find out where it came from.  Some telemarketers will say you accepted an offer you didn't, so suddenly you have an open credit account.  Call and CLOSE this.  Make sure you tell them you never authorized the creation of this account.  Get someone in trouble for your time.  Once this is done, you'll need to move this to the next category, Disputes.   If you are unable to contact a creditor, move it to Disputes, also.
  • Dispute It! - Identify items that you know are inaccurate, like late payments, collection accounts, and color code them with your third color.  These are the items you'll need to dispute with the credit reporting agencies.  Also color code any accounts you've now closed with this.  Just because you ask for an account to be closed, it doesn't mean the creditor will a) close it or b) update it with the credit reporting agencies.  That's the importance of getting the letter verifying it's closed and disputing it on your credit report.  Make sure the credit reporting agency updates these accounts as closed.  The goal is to hopefully remove any late payments or negative information from your report that is incorrect, update accounts that are closed as closed by consumer, and to update any accounts that are paid in full as such.  Also, if you are positive an account just is not yours, you'll need to have that updated/removed from your report. 

  *Tip - It helps to use a darker highlight for items that need to be disputed, since you may need to highlight over questionable items, like accounts you've just closed in the 'Follow Up' section.