Hey, I'm Your Credit Report! Pay Attention to Me!
As part of her ongoing research into UDD (Unhappy Debt Disorder), Dr. Shari Reiches determined that there is a correlation between attention paid to debt, and its happiness.
High Attention = Happy Debt, with slim rates and lower balances
Low Attention = Unhappy Debt, with higher rates and bloated balances
In her quest to reduce UDD, Dr. Reiches continues her research into ways to pay attention to debt. Here is her latest finding: Reduction of UDD by checking credit reports.
What’s a credit report?
A credit report consists of your history as a consumer and borrower. In order to develop these reports, credit reporting companies collect information that offers insight into how you manage your financial obligations. As such, your credit report may include:
- Account information: The types of accounts you have, the dates those accounts were opened, your credit limit, account balances, payment history and more.
- Collections: May include unpaid accounts that have been passed on to a collections agency.
- Inquiries: Records of when you allow access to your credit reports, such as when you applied for a credit card or loan.
- Personal Information: Your name, address, Social Security number, date of birth, etc.
While credit reporting companies don’t need your permission to collect data, they aren’t allowed to do whatever they please with the information acquired. There are strict guidelines they must follow, which are regulated by the Fair Credit Reporting Act (FCRA).1
The credit reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.
Why check my credit report?
The report may determine whether you can get a loan, and the related interest rate. So it’s important to make sure it’s accurate and complete before you apply for a loan, or even a job.
Checking your credit report also helps guard against identity theft – when someone uses your personal information such as a social security number or credit card number, to commit fraud. They may open an account in your name. When the bills don’t get paid, the delinquency is reported on your credit report.
Where can I get a copy?
Experian, Equifax and TransUnion are the three major credit reporting companies. The FCRA requires each of these companies to provide you with a free copy of your credit report, at your request, once every 12 months.
To order a free report, visit annualcreditreport.com, the centralized website set up by the three major credit reporters.
Be aware that annualcreditreport.com is the only authorized website to fill orders for the free annual credit report you are entitled to under law. Other websites that claim to offer free credit reports, scores or monitoring are not part of the legally mandated free annual credit report program per the FCRA. In many cases, the “free” product comes with strings attached, such as a conversion to a paid model if you do not cancel after a trial period.
What if there is an error?
As a consumer, you have the right to dispute information on your credit report that you believe to be inaccurate. Your dispute must be investigated by a credit bureau and the item removed from your report if it hasn’t been verified to be accurate.
If you believe there is an error, contact the credit reporting company, in writing, and explain what information you think is not accurate.
Credit reporting companies are required to investigate the disputed items in question —usually within 30 days—unless they consider your dispute frivolous. When the investigation is complete, you must receive the written results and a free copy of your report if the dispute results in a change.
How long can a credit reporting company report negative information?
Most accurate negative information can be reported for seven years. Bankruptcy information can be reported for 10 years. There is no time limit on reporting information if you apply for a job that pays more than $75,000 a year and if you apply for more than $150,000 worth of credit or life insurance. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.2
Next week Dr. Shari will provide her prescription on how to increase credit scores.
1 https://files.consumerfinance.gov/f/documents/102012_cfpb_fair-credit-reporting-act-fcra_procedures.pdf
2. https://www.consumer.ftc.gov/articles/0155-free-credit-reports
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