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Its Your Credit - Take Care of It!
Thanks to the Fair and Accurate Credit Act, American consumers
can receive a free annual credit report from each of the three
major credit bureaus-Experian, TransUnion and Equifax. You can
order your free credit report by visiting
www.annualcreditreport.com or calling 1-877-322-8228.
Monitoring your credit report regularly will ensure that you
can clear up any incorrect information and prevent identity
theft. It is recommended that consumers review their credit
reports at least once a year. Being that consumers are now
eligible to receive three free credit reports a year, you can
actually keep track of your credit report year round by ordering
one report at a time every four months. If you are ordering your
credit report because you are going to make a large purchase-for
example a house or a car-and you want to know where your credit
stands, then it is recommended to order all three reports and
compare them at least three months before you intend to apply for
the loan. Each credit report might contain slightly different
information so your credit score could vary by as much 100 points
from one report to the next. If you are simply monitoring your
credit report to prevent identity theft and other fraudulent
activities, then ordering one at a time may be enough.
Reviewing your report
Once you receive your credit report, set aside some time to
review it carefully. Eighty percent of credit reports contain
errors, and a quarter of those are serious-late payments that do
not belong to you, debt that is not yours, or accounts that you
did not open. If you do not take the time to correct these
mistakes, they can seriously affect your ability to acquire
favorable credit terms in the future.
There are four main categories you need to review in your
credit report: personal information, account history, public
records and credit inquiries.
1. Personal Information
Information contained:
- Full name
- Social security number
- Date of birth
- Current and previous addresses
- Current and previous employers.
Check this information closely and make sure that it is all
correct. Common mistakes occur among family members with similar
names who reside in the same address. Variations of your name are
ok as long as you have previously applied for credit using the
variations. Incorrect information can result in another person's
accounts reported on your credit report.
2. Account History
Information contained:
- Home loans
- Auto loans
- Student loans
- Personal loans
- Credit cards
Pay close attention to the account numbers, statuses,
balances, and payment statuses. Make sure all accounts listed are
actually yours.
3. Public Records
Information contained:
- Bankruptcies
- Tax liens
- Lawsuit debts
- Collections
- Other civil and financial judgments
Make sure all of this information is correct and updated. You
should realize that certain bankruptcies and other negative
information can remain on your credit report for up to 7
years.
4. Credit Inquiries
Information contained:
- Who requested to view your credit report
There are two types of inquiries that you will see on your
credit report. Hard inquiries are those that you initiated when
you requested your credit report or authorized a lender or credit
card company to view your credit report. Soft inquiries are those
made by credit card companies that send you pre-approved
promotions for their credit card. Soft inquiries are only visible
to you. A lender cannot see them when they review your credit
report. There is much speculation as to how much inquiries affect
your credit score. Soft inquiries do not affect your credit score
at all. According to Fair Isaac Corporation, each hard inquiry
can subtract no more than five points from a person's score.
Often no points are subtracted. Since it is normal for a consumer
to shop around for interest rates when applying for a home or car
loan, multiple auto or mortgage inquiries in any 14-day period
are counted as just one inquiry.
The subject matter contained in our educational publications
is for informational purposes only. We suggest that you consult
your financial or other advisors when planning for your specific
needs or requirements.
MORE RESOURCES:
Clock ticks down on credit bureau class-action dealIndianapolis Star, United States - 56 minutes agoIn a class-action settlement, credit bureau TransUnion has agreed to provide free credit- monitoring services to millions of consumers to settle claims it ... |
MORE COLLEGE CREDITChicago Sun-Times, United States - 10 hours agoDespite the current nationwide credit crunch, the State of Illinois secured $100 million for the student loans by tapping a new source -- credit unions. ... |
Credit - Google News
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