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Free Credit Report

Understanding your credit report is a key part of financial planning. You have the right to receive a free credit report from each of the three major credit bureaus- Experian, TransUnion, and Equifax- once a year through the Annual Credit Report Request Service at www.annualcreditreport.com. The free reports do not include credit scores. You may request your score for a fee at the time of ordering the free reports if you choose to do so.

Your Credit Report

A credit report is divided into four sections:

  1. Personal identification - Your name(s), your address(es), your employment history and marital status
     
  2. Trade lines - Your history of handling credit:
    1. Creditors and account information
    2. Balances and payment patterns for the last 24 to 36 months
    3. Accounts in collections
    4. Accounts in dispute
       
  3. Public records - Information about lawsuits to which you are a party, liens or legal claims on your property, bankruptcies, and past due child or spousal support
     
  4. Inquiries - Who has requested your report for at least the past year and your history of applications for loans or credit

Your Credit Score

When evaluating your credit for a loan many lenders will review your credit score. A credit score is a numerical guide that is representative of lending risk; scores generally range from 300 to 850, with higher numbers indicating a lower risk. Scores reflect payment patterns with emphasis placed on recent activity.

To maintain a strong credit score:

  • Pay loans on time
  • Keep balances low (in relation to the account limit)
  • Apply for and open new accounts only as needed

Negative information, if accurate and timely, cannot be removed from your credit report- most negative information will remain for seven years. These types of events are considered quite serious, although older items and items with small amounts will count less than recent items or those with larger amounts.

Negative factors include:

  • Bankruptcies - will stay on your credit report for 7-10 years, depending on the type
  • Foreclosures
  • Lawsuits
  • Wage attachments
  • Liens
  • Judgments

FICO® Scores consider:

  • How late they were
  • How much was owed
  • How recently they occurred
  • How many there are
     

Payment History Tips

Contributing 35% to your score calculation, this category has the greatest effect on improving your score, but past problems like missed or late payments are not easily fixed.

  • Pay your loans on time. Delinquent payments and collections can have a major negative impact on your FICO Scores.
  • If you have missed payments, get current and stay current.
  • The longer you pay your bills on time after being late, the more your FICO Scores should increase. Older credit problems count for less, so poor credit performance won't haunt you forever. The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report. And good FICO Scores weigh any credit problems against the positive information that says you're managing your credit well.
  • Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
  • If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.

This won't rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO Scores.

Your Rights

Credit bureaus are regulated by the Federal Trade Commission, and must comply with the Fair Credit Reporting Act (FCRA). The FCRA provides consumers certain rights:

  • The right to access your reports - You may access free reports through the Annual Credit Report Request Service, or purchase reports directly from the credit bureaus. If you have been denied credit, insurance, or employment because of information on your credit report, you are entitled to a free copy of that report directly from the credit bureau.
  • The right to accuracy - It is the credit bureau's responsibility to report correct information. If you discover inaccuracies, file a dispute with the bureau. When you receive your credit report, you will receive instructions on disputing information either on-line or through the mail.
  • The right to have negative information "age-off" - While positive information can remain on a credit report indefinitely, most negative information will be removed after seven years.
  • The right to privacy - Only those with a need recognized by the FCRA may access your reports. This is usually a creditor, insurer, landlord or other business.
  • The right to seek damages - If you believe a credit bureau, a business that provides information to the bureau, or a user of the information contained in your report violates the FCRA, you can file a complaint with the Federal Trade Commission. You may also have additional rights concerning your credit information under state law.

Fixing Errors

Mistakes do happen. Be sure to have incorrect or outdated information investigated and removed by disputing the error through the credit bureaus. The bureau has 30 days to investigate, during which time a dispute notation will show up on your report. The credit bureau must give you a written report of the investigation and a copy of your report if it results in any change. You may ask that anyone who has recently received your report be notified.

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