Achieving good credit is much more than what appears on your credit report. Good credit is achieved by successful budgeting skills, credit management skills and understanding what lenders are looking for when determining if they want to establish a financial relationship with you. Achieving good credit is a lifestyle and requires good information, good spending habits and a distinct discipline. Whether you're just starting out entering the world of credit, made some mistakes in the past, life changes has damaged your credit or you just want to be smarter as a consumer, this book was written with you in mind! Throughout the book you will find step-by-step instructions on how to EDIT YOUR CREDIT.
YES YOU CAN EDIT YOUR CREDIT
20 YEARS EXPERIENCE WORKING FOR THE INDUSTRY'S LEADING CREDIT REPORTING AGENCYBy Jolanda Mosley AuthorHouse
Copyright © 2009 Jolanda Mosley
All right reserved.ISBN: 978-1-4490-0875-8Contents
What Your Credit Report Says About You...................................1ORDERING YOUR CREDIT REPORTS!!!!!!!......................................11What Your Credit Score Says About You....................................17Credit Repair - No one else can do it for you!...........................25Safe Places to Receive Help..............................................29Now that I've received my reports, where do I start?.....................35What Consumer Rights Do I Have?..........................................45Dealing with Debt Collectors.............................................53Protecting Your Identity.................................................59DANGER!!!! Scams to Avoid................................................71Notes....................................................................91
Chapter One
What Your Credit Report Says About You
A credit report tells the story of the kind of relationship that you have with others whom you do business with. For example, most of us have a library card. When you go to the library to check out a book, there is a history of what types of books you have checked out, when you checked them out, when they were scheduled to be returned and when you actually returned them. Also included are what late fees you have paid and which ones are outstanding. Your library card gives a history of the type of relationship that you have with the library.
A credit report works virtually the same way. It is designed to give lenders a look into whether or not you pay your bills on time, how much debt you are in, what types of credit you have (i.e. revolving, installment, etc.) as well as other areas.
Credit reports are widely used today to determine everything from if you will be hired for a job, if insurance will be extended to you or if you will receive financing for that wonderful house on the hill or be able to get financing for the car of your dreams. Yes you read it correctly. There are some potential employers that will pull your credit report to see how you are paying your bills to determine whether or not you will be offered the job or receive a promotion on your existing one. While I believe in some instances that this is warranted depending on the type of job that you are applying for, my personal opinion is that in other cases what does it have to do with anything? Your credit report cannot tell the story that you were laid off, suffered an illness, went through a divorce or experienced some other "life change" that has now left your credit less than perfect. You want to get the job so that you can begin to rebuild your life and pay people what you owe them, but you can't because your credit report reflects too many "bruises". In a lot of cases it really is a catch 22. Nevertheless, this is the society that we live in and I want to offer my years of experience to help you get back on your feet ... one step at a time.
The information contained in your credit report is vital but it is up to you as the consumer to manage it and oversee it. Believe me, you must be the one to take an active role in managing your credit report. This book is not to promote any products offered by the industry but I am writing it to serve as a guide for you to begin to get your credit life on track and try to walk you through the overwhelming amount of information.
The Federal Trade Commission (FTC) is the branch of our government that writes the laws and governs all of the aspects of credit reporting. The Fair Credit Reporting Act (FCRA) is the law designed to promote that the information contained in your report is accurate, that the information in your report is fair all while ensuring that your privacy is protected. As a consumer, the FCRA provides you with rights as well! Most of us are oblivious to the fact that there are rights that protect us. In my experience, when I would have discussions with people about a credit report, I can actually count on one hand the amount of them that were even aware that there were things in place to protect them. Most people have been misguided and they believe that they must just accept whatever the credit report says about them.
Before, I venture further into what rights you have as a consumer; I don't want to take for granted that you know what a credit report is and what it might contain about you. If this is too elementary for you, I don't apologize but I do applaud you for knowing at least the basics. However, you would be very surprised at the number of people who have no idea what a credit report is, so this is for their education. I have already given you the "library card" analogy. Your credit report is designed to paint a picture of the type of relationship you have with your lending institutions...... In short, it is designed to show whether or not you pay your bills and if you pay them timely.
The Fair Credit Reporting Act (again, this is the act designed to promote accuracy, fairness and privacy of what's contained in your report) defines a consumer credit report as:
Any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for:
Credit or insurance to be used primarily for personal, family, or household purposes
Employment purposes
Any other purposed authorized to have a qualified, allowable reason to need the information in your credit report
I will certainly address what the law says is an allowable reason to need your information shortly in this same chapter.
Okay. Now that you know what a credit report is, I think it is equally as important to know what a credit report IS NOT and what it cannot have in it.
A credit report may not contain any information that would be indications or ethnicity, gender, religious preferences
A credit report may not containin formation disclosing or inferring to a consumers medical condition. For example, The Alzheimer's Clinic cannot be listed on your report. All types of assumptions could be made by someone reviewing the information contained in your report thereby violating your rights as a consumer. However, their may be a collection account appearing on your report collecting for The Alzheimer's Clinic. In this scenario, if anyone else views your file, although they will see the collection agency, they should not be able to see The Alzheimer's Clinic.
A credit report may not contain information about any arrests or trouble that you may have had with the law
Your report will be the information that a credit reporting agency has in their file about you. The credit reporting agencies take the information that is given to them about you from your lenders which are also the agency's customers (I.e. Sears, GMAC, Capital One, etc.), assemble it and then it is given to you. Generally, here is the type of information that you should expect to see in your credit report.
Personal Information
Your personal information is critical to ensure accuracy of your file. This information comes from data that you provided as well as from creditors that you have a relationship with i.e. Sears, GMAC, Capital One, etc.
Your current address and any prior addresses where you either resided and/or used as a mailing address. This would include physical addresses as well as post office, drop boxes or rural routes. Any other addresses that the credit reporting agencies contain in the file on you
Your social security number and any variations of the number you provided than what is contained in the credit reporting agencies file. For example, if when you request your credit report and you gave them your assigned social security number of "123-45-6789" but one of your lenders has reported to the credit agency that the social they have on file for you is "123-45-6788" (the difference being the very last digit), the reporting agency MUST disclose to you any of those differences than what you provided. This is also true for any personal information you provided.
Your date of birth and any differences contained in the credit reporting agencies file
Current or previous employers
Your telephone number (not all of the credit reporting agencies list this information in their files)
Account Information
This information is given to the credit reporting agencies by creditors that you have a relationship with. There are several pieces of information that they report. Some of the credit reporting agencies may separate the positive (good accounts) from the negative (bad accounts). There may be other pieces of information but the list of data below represents the majority of what is reported:
The name of the account The account number (to protect your security, the complete account number may not be listed on the report) An address and/or phone number of the creditor Date account was opened Type of account (for example revolving charge, installment, mortgage, auto, etc) Terms of the account How you are actually paying against the account. Is the account being paid on time according to the terms of your agreement, have you missed some payments, is this account in a collection state or has it been written off (charged off), etc. Date that the creditor reported how you were paying this account Date account was closed if it has been closed Balance Credit Limit Who has responsibility for the account (is it individual account, joint with another user or are you only an authorized user of the account)
Public Record Information
This is information that has been obtained from local, state or federal courts. Any judgment (suit was filed against you), bankruptcy or tax lien that are a matter of public record may appear in your report. The type of information that is reported is:
Type of public record (judgment, lien, bankruptcy) Filing date Dismissed, Discharged, Paid or Release Date (if the item has been paid; Release also means paid) Assets and Liabilities (this information may not be reported by all credit reporting agencies) Plaintiff Attorney (this is information may not be reported by all credit reporting agencies)
Inquiry Information
Inquiries are the companies that have reviewed your credit report. Not just anyone can review the information contained in your credit report. For example, the neighbor that you had a fight with will not be able to call the credit reporting agency and ask for your report. In this section, I will address who can see your report.
There are 2 types of inquiries that can appear on your file: those that anyone viewing your report can see and those that only you can see.
Inquiries reflect who accessed your report for review Date your report was accessed Reason that your report was accessed i.e. you were applying for a job, credit card, home loan, etc.
I'm certain that you've heard that too many inquiries can hurt your credit score. Well this statement is certainly true but it also depends on the TYPE of inquiry as well. You as a consumer can order a copy of your credit report from one of the 3 agencies every day for the next year (not sure why anyone would want to do that BUT) even if you do, NONE of those inquiries will EVER be factored into your credit score. These are considered consumer disclosures and a consumer cannot ever be negatively affected or your credit score lowered just because you want to see what's on your credit report. On the other hand, when you as a consumer initiate a transaction I.e. you applied for credit those type of inquiries DO affect your score and too many will lower your score. Now who determines what's too many? You will never receive a straight answer about this from anyone because it's one of those "it depends" type questions. The best advice to you is to only apply for things as you NEED them. If you're walking through the mall and a store is offering free stemware, pearls or stainless steel flatware(all of which is probably the cheapest ever) just by completing the credit application..... JUST KEEP WALKING.... even better yet.... RUN! I'll discuss this in more detail in Credit Scoring".
Chapter Two
ORDERING YOUR CREDIT REPORTS!!!!!!!
Okay, so hopefully you have a much better understanding of what a credit report is, what it contains and why it would be used. So now, you need to take action by:
ORDERING YOUR CREDIT REPORTS!!!!!!! Yes I'm shouting [??]
This is the part where we as consumers begin to get rather timid. There are all kinds of decisions being made about you based on a piece of paper, a credit report, a score....... yet as the person that the decision is being made about, because you've not seen the report OR afraid of what's on it, you fail to even look at it. Let me ask you a few questions. If your dream job were available, you applied, prepared, interviewed for it(and it went rather well) and they called you saying "Sorry, we didn't choose you" wouldn't you want to know why? If you have a goal of being a homeowner, sacrificed many pleasures in order to save your money, worked really hard and then you completed the loan application and you were rejected, wouldn't you at least want to know why? What if you applied for credit at the store just so you could save "10%", you got the discount BUT your credit was denied, wouldn't you at least want to check it out so it doesn't happen again?
Being denied or rejected can be extremely embarrassing, disappointing, overwhelming and just down right humiliating BUT the good news is in ordering your credit reports, you are taking the first step of "EMPOWERING" yourself to take control!
There are a lot of gimmicks, tricks and scams out there even when you are simply just trying to order your credit report. Don't get tricked into buying a fee based service when in most instances you have the right to get your report for FREE!
The federal law, Fair Credit Reporting Act (FCRA), states that you have the right to receive a copy of your credit report AND the credit reporting agencies must provide all of the information in your file at the time you make the request. This federal law also mandates that you are entitled to a free copy of your credit report if you've been denied credit, employment, insurance OR you've experienced any type of adverse action against you. An example of an adverse action could be your credit card company has sent you a notice stating that your line of credit has been cancelled and you can no longer charge on this card. If you've experienced any of the prior instances, you are entitled to a free copy of your credit report when you request it from the credit reporting agency within 60 days of the date you were notified that you were denied. The law states that the notice must include the name of the credit reporting agency, their address and phone number. Most notices will also include a website as well. There are 3 nationwide consumer reporting agencies:
Equifax
1-800-685-1111
www.equifax.com
Experian
1-888-397-3742
www.experian.com
TransUnion
1-800-916-8800
www.transunion.com
In 2004, an amendment was made to the federal law that states upon a consumers request the 3 nationwide reporting agencies must provide you with a free, "complimentary" copy of your credit report, upon your request, once every 12 months. In other words, even if you have not been denied credit, employment, insurance OR experienced any adverse action, you are still entitled to a "complimentary" credit report. This report may also be referred to as your annual credit report. To order your free annual credit report:
www.annualcreditreport.com
1-877-322-8228 or
Annual Credit Report Requests
P.O. Box 105281
Atlanta GA 30348-5281
You may print the Annual Credit Report Request Form at www.annualcreditreport.com or www.ftc.gov/credit
As you can see, there are 3 different ways your credit report: mail, phone or over the internet. I want to briefly touch on each to hopefully help you in determining which way is best for you. Let me start by saying that whichever way you choose to request your report, please just get it done. Remember it's the first step to empowering yourself!
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Excerpted from YES YOU CAN EDIT YOUR CREDITby Jolanda Mosley Copyright © 2009 by Jolanda Mosley. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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