When deciding whether or not to extend credit, we rely on credit bureaus to provide
information about you. If you use a checking or savings account, owe money on your car,
rent an apartment, or rely on credit for whatever purpose, chances are you have a credit
record on file.
This guide will tell you:
- All about credit reports - who writes them, who sees them.
- What your data means to us.
- How to correct errors or dispute derogatory findings.
- How you can protect and monitor your credit information.
- Where to go to order your own report.
- Where to find related sites on the Internet.
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Your credit report is information about your borrowing and repayment history. It is put
together using facts provided by your creditors and from public records such as court
documents. Credit bureaus compile the data for potential creditors, employers, and others
who can show they have a legitimate business reason to ask for it. Credit bureaus do not
approve or reject you as a credit risk.
Your records are most likely to be requested from one (or all) of the three largest credit bureaus in the United States:
- Experian (formerly TRW)
- Trans Union
An annual survey published by Trans Union shows that most consumers feel the benefits of
credit reports outweigh concerns about privacy. Businesses know that they can count on the
information provided by the credit bureau. By using credit bureau information, we are
better able to approve loans faster, for more borrowers, with less risk. The result is
that we have fewer defaulted loans, which lets us keep our costs down.
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Getting a Copy
Under the Fair Credit Reporting Act (FCRA) you are entitled to a free credit report within
60 days of being denied credit, employment, insurance, or rental housing based on
information in the report.
You are also entitled to a free report once a year if you certify: you are unemployed and seeking employment; you are receiving public welfare assistance; or you believe your credit file contains inaccuracies resulting from fraud.
Otherwise, you will need to pay a fee for each report you request. Equifax, Experian
(TRW), and Trans Union are the top three credit bureaus. However, since not all creditors
"report in" to each credit bureau, financial experts suggest you request your
credit records from all three if you are concerned about your credit history.
Links and postal addresses to all three companies are listed in this Credit Report Guide
on the Keeping Tabs page. To order your credit report, they will most likely ask you to provide the following:
- Full name (including Jr., Sr., etc.)
- Spouse's first name (if married)
- Current address
- Phone number
- Address(es) for the past two years if applicable
- Social Security number
- Birth date
- Current employment information
- Any fees
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Note: If you've never read a credit report before - especially if you are disputing
a derogatory one - it's a good idea to have a credit counselor or someone knowledgeable
review it with you.
Although credit bureau reports may not look alike, they contain many of the same items.
Usually included are your credit record and relevant facts such as your age, address,
marital status, and employment history. When reviewing, check the details! Be sure your
name is spelled right, and the record shows the correct Social Security number and birth
date. Any phone numbers, addresses and employer information should be up-to-date.
Your report will show who has requested information about you at your request (such as
when you apply for a credit card). It should also tell you who was given information by
the bureau in order to send you offers of credit or insurance.
A credit bureau report also lists your creditors (such as retail stores, mortgage
companies, and credit card companies.) You can check for obvious problems, but be aware
that lenders also look for certain behaviors. For example, even if you have no outstanding
balances, holding or applying for several credit cards may hurt your cause. Or your debt
ratio, the percentage of your monthly income that goes towards credit payments, may be
higher than acceptable.
You may also be denied credit if you have not established enough of a credit history to be
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What can you do if your credit report contains incorrect or derogatory information?
If the information in your report is inaccurate or unfair, you will need to correct it.
This can take some time and effort on your part, but remember - a negative report will
haunt you for at least seven years.
First, contact the creditor that filed the complaint, correct the error and ask that any credit bureaus involved be notified in writing. Be sure to document your efforts. If the credit bureau made the mistake, challenge it. By Federal law, it will have to delete the disputed information if it can't be confirmed. Both the credit bureau and the creditor who filed the derogatory information must help you resolve the issue in a timely manner, within 30 days.
If the credit bureau finds their information to be confirmed, you may still attach a "Statement of Dispute" to argue your side of the story. (For example: "I returned that purchase, and they lost the credit slip.") This should not be confused with an explanatory note that might say something such as, "I lost my job and wasn't able to pay my bills that month." Warning: explanatory notes can do more harm than good. And because of the seven year holding period, both notes might actually stay on your record longer than the original problem transaction.
With new regulations effective October 1997, both your creditor and the credit bureaus must take reasonable steps to ensure that incorrect information does not reappear in your file after it has been removed.
Note: Paying off a delinquent account will clarify that nothing more is owed, but the fact that it was once delinquent can stay on your record up to seven years. Similarly, closing an account doesn't remove it from your credit report.
Once corrected, the credit bureau will send a revised copy of your report to any credit grantor who requested it over the past six months. However, they may do so only if you ask them to send it.
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Although it isn't that common, your credit report will show you if someone is using - or
trying to use - your credit information for fraudulent purposes. You may see credit cards
or loans you did not apply for, or address change notices you did not submit. Worse, your
good credit record may have been damaged.
Notify the credit bureau(s) at once. They can offer advice and help you put
together a list of affected creditors to notify. They also add a fraud statement to your
report. This action alerts future creditors to verify your identification before granting
credit. Although the credit bureau may be helpful, bear in mind that it is your
responsibility to notify creditors of fraud.
Currently, companies can ask to review your credit history and send written credit or
insurance solicitations based on what they find. You have the right to keep your credit
information from being distributed without your permission.
Federal law states that credit bureaus must provide an address and toll-free telephone number that you may use to request your credit report not be distributed without your permission.
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With today's database technology, it may not be enough to check your credit report every
couple of years. Your information is constantly changing. If in the next year or so you're
planning on purchasing a home, refinancing an existing home loan, or buying something that
may require credit (like a new car or furniture), you may need to check your reports on a
quarterly or semi-annual basis. Don't wait until you're ready to apply for a loan, because
if there is a problem, it may take time to be resolved.
ClickForFunds.com Credit Center
- The single destination on the Internet for your credit needs, complete with tools, news,
and expert advice.
- Individual credit bureaus - the repositories of your credit information
- Information Service Center
- P.O. Box 740241
- Atlanta, GA 30374-0241
National Consumer Assistance Center
P.O. Box 949
Allen, TX 75013-0949
Trans Union Corporation
Customer Disclosure Center
P.O. Box 390
Springfield, PA 19064-0390