Your Credit And More
Your credit history, which is comprised of the history of your accounts, payments, debts, and other nuances, is recorded in a report and maintained by the Consumer Reporting Agencies (CRAs). One type of CRA is a credit bureau. These credit bureaus have become household names: TransUnion, Experian, and Equifax. Credit bureaus collect and sell information pertaining to credit you’ve applied for, loans you have taken out, payments you have made, if you’ve been sued, if you have had liens reported, and much more. All of this is combined and represented by what is known as your FICO score.
To protect your interests, the Fair Credit Reporting Act (FCRA) was established. This act ensures that CRAs provide correct, accurate, and complete information to those who request it to evaluate your credit and history. With that, you have very specific rights under the FCRA, which are:
1. The right to receive a free copy of your credit report.
2. The right to know who requested your credit report within a 12 month period for most reasons, and 24 months for those who requested it for employment purposes.
3. The right to a free copy of your credit report if you are ever denied for an application of credit. Please note that your request for this copy must be made within 60 days of the denial.
4. The right to dispute any information reported in your file. And by law, the CRAs must investigate and assess your dispute request.
Knowing how to evaluate your credit is important. There are many components to a credit report which have weight in your resulting score. For example, the ratio of credit to debt is a major factor. Another is the history of payments on all loans and accounts—some are more important than others.
What Should I Look For On My Credit Report?
You should certainly look at every piece of your report. Aside from the FICO score, there are other line items to analyze.
For one, you want to make sure all personal information is accurate. This includes your names listed, your addresses, the suffix listed, and other tidbits of information pertaining to your identity. If something looks off, this is a red flag and should prompt you to investigate further. Identity theft is a growing concern, and this is the first way to measure your exposure to it.
Secondly, you want to review your public records. Are there any bankruptcies, liens, or judgments reported? Are they accurate? Remember that these are allowed to be reported between 7-10 years, depending on the type of action it was.
Third, review your accounts. You will want to review them to make sure they are all accurate and ones you applied for. Scan these accounts for odd activity, payments, or charge-offs that are inaccurately being reported.
Last, you will want to monitor the inquiries listed. Whenever a company or person requests a report on you, this is recorded. You will want to make sure that all inquiries were authorized by you. The law only permits companies and people to pull a report if you have authorized them, whether through a job application, credit application, or another form of authorization included in any application.
If anything looks inaccurate, you will want to dispute the information. You will also want to contact the appropriate authority depending on the depth of the accuracy.
If everything looks good, then relax. You are safe and sound! But remember to continue monitoring your credit on a regular basis.
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