Introduction l
Credit reports l Getting a copy l
Reading it l Correcting
it l Protecting it l
Keeping tabs
Introduction
Getting a Mortgage Credit Report makes sense if you are unsure as to whether or not you will qualify for a loan or if you are interested in finding out how much you will qualify for. When deciding whether or not to extend credit, we rely on credit bureaus
to provide information about you. If you use a checking or savings
account, owe money on your car, rent an apartment, or rely on credit for
whatever purpose, chances are you have a credit record on file.
This guide will tell you:
- All about credit reports - who writes them, who sees them.
- What your data means to us.
- How to correct errors or dispute derogatory findings.
- How you can protect and monitor your credit information.
- Where to go to order your own report.
- Where to find related sites on the Internet. Top of Page
Credit reports
Your credit report is information about your borrowing and repayment
history. It is put together using facts provided by your creditors and
from public records such as court documents. Credit bureaus compile the
data for potential creditors, employers, and others who can show they
have a legitimate business reason to ask for it. Credit bureaus do not
approve or reject you as a credit risk.
Your records are most likely to be requested from one (or all) of the
three largest credit bureaus in the United States:
- Equifax
- Experian (formerly TRW)
- Trans Union
An annual survey published by Trans Union shows that most consumers feel
the benefits of credit reports outweigh concerns about privacy.
Businesses know that they can count on the information provided by the
credit bureau. By using credit bureau information, we are better able to
approve loans faster, for more borrowers, with less risk. The result is
that we have fewer defaulted loans, which lets us keep our cost down. Top of Page
Getting a copy
Under the Fair Credit Reporting Act (FCRA) you are entitled to a free
credit report within 60 days of being denied credit, employment,
insurance, or rental housing based on information in the report.
You are also entitled to a free report once a year if you certify: you
are unemployed and seeking employment; you are receiving public welfare
assistance; or you believe your credit file contains inaccuracies
resulting from fraud.
Otherwise, you will need to pay a fee for each report you request.
Equifax, Experian (TRW), and Trans Union are the top three credit
bureaus. However, since not all creditors "report in" to each credit
bureau, financial experts suggest you request your credit records from
all three if you are concerned about your credit history.
Links and postal addresses to all three companies are listed in this
Credit Report Guide on the Keeping Tabs page. To order your credit
report, they will most likely ask you to provide the following:
- Full name (including Jr., Sr., etc.)
- Spouse's first name (if married)
- Current address
- Phone number
- Address(es) for the past two years if applicable
- Social Security number
- Birth date
- Current employment information
- Signature
- Any fees Top of Page
Reading it Note: If you've never read a credit report before -
especially if you are disputing a derogatory one - it's a good idea to
have a credit counselor or someone knowledgeable review it with you.
Although credit bureau reports may not look alike, they contain many of
the same items. Usually included are your credit record and relevant
facts such as your age, address, marital status, and employment history.
When reviewing, check the details! Be sure your name is spelled right,
and the record shows the correct Social Security number and birth date.
Any phone numbers, addresses and employer information should be
up-to-date.
Your report will show who has requested information about you at your
request (such as when you apply for a credit card). It should also tell
you who was given information by the bureau in order to send you offers
of credit or insurance.
A credit bureau report also lists your creditors (such as retail stores,
mortgage companies, and credit card companies.) You can check for
obvious problems, but be aware that lenders also look for certain
behaviors. For example, even if you have no outstanding balances,
holding or applying for several credit cards may hurt your cause. Or
your debt ratio, the percentage of your monthly income that goes towards
credit payments, may be higher than acceptable.
You may also be denied credit if you have not established enough of a
credit history to be evaluated. Top of Page
Correcting
it
What can you do if your credit report contains incorrect or derogatory
information?
If the information in your report is inaccurate or unfair, you will need
to correct it. This can take some time and effort on your part, but
remember - a negative report will haunt you for at least seven years.
First, contact the creditor that filed the complaint, correct the error
and ask that any credit bureaus involved be notified in writing. Be sure
to document your efforts. If the credit bureau made the mistake,
challenge it. By Federal law, it will have to delete the disputed
information if it can't be confirmed. Both the credit bureau and the
creditor who filed the derogatory information must help you resolve the
issue in a timely manner, within 30 days.
If the credit bureau finds their information to be confirmed, you may
still attach a "Statement of Dispute" to argue your side of the story.
(For example: "I returned that purchase, and they lost the credit
slip.") This should not be confused with an explanatory note that might
say something such as, "I lost my job and wasn't able to pay my bills
that month." Warning: explanatory notes can do more harm than good. And
because of the seven year holding period, both notes might actually stay
on your record longer than the original problem transaction.
With new regulations effective October 1997, both your creditor and the
credit bureaus must take reasonable steps to ensure that incorrect
information does not reappear in your file after it has been removed.
Note: Paying off a delinquent account will clarify that
nothing more is owed, but the fact that it was once delinquent can stay
on your record up to seven years. Similarly, closing an account doesn't
remove it from your credit report.
Once corrected, the credit bureau will send a revised copy of your
report to any credit grantor who requested it over the past six months.
However, they may do so only if you ask them to send it. Top of Page
Protecting it
Although it isn't that common, your credit report will show you if
someone is using - or trying to use - your credit information for
fraudulent purposes. You may see credit cards or loans you did not apply
for, or address change notices you did not submit. Worse, your good
credit record may have been damaged.
Notify the credit bureau(s) at once. They can offer
advice and help you put together a list of affected creditors to notify.
They also add a fraud statement to your report. This action alerts
future creditors to verify your identification before granting credit.
Although the credit bureau may be helpful, bear in mind that it is your
responsibility to notify creditors of fraud.
Currently, companies can ask to review your credit history and send
written credit or insurance solicitations based on what they find. You
have the right to keep your credit information from being distributed
without your permission.
Federal law states that credit bureaus must provide an address and
toll-free telephone number that you may use to request your credit
report not be distributed without your permission. Top of Page
Keeping tabs
With today's database technology, it may not be enough to check your
credit report every couple of years. Your information is constantly
changing. If in the next year or so you're planning on purchasing a
home, refinancing an existing home loan, or buying something that may
require credit (like a new car or furniture), you may need to check your
reports on a quarterly or semi-annual basis. Don't wait until you're
ready to apply for a loan, because if there is a problem, it may take
time to be resolved.
Individual credit bureaus - the repositories of your credit
information
Equifax
www.equifax.com
Information Service Center
P.O. Box 740241
Atlanta, GA 30374-0241
1-800-685-1111
Experian (TRW)
National Consumer Assistance Center
www.experian.com
P.O. Box 949
Allen, TX 75013-0949
1-888-EXPERIAN (1-888-397-3742)
Trans Union Corporation
www.transunion.com
Customer Disclosure Center
P.O. Box 390
Springfield, PA 19064-0390
1-800-888-4213 Top of Page
