Credit Q&A

Your Credit Report

What is a credit report?
A credit report is a record of your credit history and includes the following:

  • Your identity.  Your name, address, full or partial Social Security number, date of birth, and possibly employment information.
  • Your existing credit.  Information about credit that you have including credit card accounts, mortgages, car loans, and student loans.  It may include terms of your credit, how much you owe creditors, and your payment history.
  • Your public record.  Information about any court judgments against you, tax liens on your property, or whether you have filed for bankruptcy.
  • Inquiries about you.  A list of any companies or individuals who have recently requested a copy of your report.

Why are credit reports important?
 
Credit reports are important because lenders, insurers, employers, and others can obtain copies of your credit report from credit bureaus to assess your financial management skills and financial responsibility.

  • Lenders may use your credit information to decide whether you approve you for a loan and if so what the terms of it will be.
  • Insurance companies can use the information to decide whether you can get insurance and what rates you will pay.
  • Employers can use your report, if you give them permission, to decide whether or not you should be hired.
  • Telephone and utilities companies can use the information to determine whether to provide services to you.
  • Landlords can use the information when deciding whether to rent an apartment to you.

Who collects and reports credit information about me?
There are three major credit bureaus- Equifax, Experian, and TransUnion- that gather and maintain the information compiled into your credit report.  The credit bureaus will then provide the credit report to companies or individuals who request it.

Where do credit bureaus get their information?
Bureaus obtain their information from your creditors including banks, credit card issuers, or your auto finance company.  They also get information from public records including property or court records.  Each credit bureau gets their information from different sources so the information may vary from bureau to bureau.

How can I get a free copy of my credit report?
You get one free credit report per every twelve months from each of the three major credit bureaus by visiting www.annualcreditreport.com or calling (877) 322-8228.  To get the report you need to provide information such as your name, address, Social Security number, and date of birth.  You can order one report or all three at the same time or each one at various times throughout the year.  Which option you take depends on your goal.  If you want a complete view of your credit record at a particular moment, you should examine your report from each of the three bureaus at the same time.  However, if you want to detect errors and monitor changes in your report over time, you can choose to review a single report every 4 months.

Who else is allowed to see my credit report?
Credit reports contain personal information so access is limited.  Credit bureaus can only provide your credit report to:

  • lenders from whom you are seeking credit;
  • lenders who have already granted you credit;
  •  telephone, cell phone, and utility companies that are considering providing services to you;
  • your employer or prospective employer, but only if you agree;
  • insurance companies who have issued or may issue an insurance policy to you;
  • government agencies considering you for government benefits; and
  • anyone with a legitimate business need for the information such as potential landlords or banks where you are opening checking accounts.

Credit bureaus will also provide your credit report if required by court orders or federal grand jury subpoenas   Upon your written request, they will issue your report to a third party.

Does the credit bureau decide whether or not to grant me credit?
No, they do not make credit decisions.  They only provide your credit report to lenders who then decide whether or not to grant you credit.

How long does negative information, such as late payments, stay on my credit report?
Generally, negative credit information will remain on your report for 7 years.  If you filed for personal bankruptcy, it will be on your report for 10 years.  Information regarding lawsuits or unpaid judgments can be reported for 7 years or until the statute of limitations runs out, whichever is longer.  Information about criminal convictions may remain on your report indefinitely.

What can I do if I am denied credit, insurance, or employment because of something in my credit report?  What can I do if I receive less favorable credit terms than other consumers because of the information in my credit report?
If you are denied credit, insurance, employment, or other adverse action because of information in your credit report, the lender, insurance company, or employer must notify you and provide you with the name, address, and phone number of the credit bureau that furnished the report used to make the decision.  You can get a free report in addition to your annual free report from the bureau if it is requested within 60 days after receiving the notice.  

Lenders may also use a credit report to set the terms of credit you are offered.  If your terms are less favorable than consumers with better credit history, the lender may give you a notice with the credit bureau’s information.  You can also get an additional free report if requested within 60 days after receiving the notice.

If you receive a notice, it is a good idea to get your free report and review the information.  If you think there is inaccurate or incomplete information attempt to resolve the issue.

I’ve been receiving unsolicited credit offers.  Why?  What can I do to opt out?
Credit bureaus may sell the names and addresses of consumers who meet certain criteria to creditors or insurers, you must then offer them credit or insurance.  You can opt out by calling 888-5-OPTOUT (888-567-8688) or visiting www.optoutprescreen.com.  You will need to provide information including your name, address, Social Security number, and date of birth.  You can opt out for either 5 years or permanently.  If you choose to opt out permanently, you will need to fill-out, sign, and mail-in a form.  You can reverse your decision to opt out at any time and begin to receive offers of credit or insurance by calling the toll free number or visiting the website.

Your Credit Score

What is a credit score?  How is it calculated?
 A credit score is a number reflecting the information in your credit report.  The score summarizes your credit history and helps lenders to predict the likelihood of you repaying the loan and make payments on time.  They will use the score in determining whether to grant you credit or the rate you will pay.  

Information on your credit report can include:

  • the number and type of accounts you have (credit cards, auto loans, mortgages, etc)
  • whether or not you pay your bills on time
  • how much of your available credit you are currently using
  • whether you have any collection actions against you
  • the amount of your outstanding debt
  • the age of your accounts

What can cause my credit score to change?
Changes to your credit report will cause your credit score to change.  If you pay your bills late or incur debt, you credit score will be detrimentally affected.  If you pay down an outstanding balance or correct an error, you credit score may improve.

How can I get my credit score?
When applying for credit, a lender may tell you what your score is for free.  You may also purchase your score from any of the credit bureaus by calling or visiting their websites.

  • Equifax: 1-800-685-1111 or www.equifax.com/compare-products
  • Experian: 1-888-397-3742 or www.experian.com/consumer-products/personal-credit.html
  • TransUnion: 1-800-493-2392 or www.transunion.com/corporate/personal/creditTools.page

Credit Report Errors 

How can I correct errors in my credit report?
If you find errors, you can dispute the information and request it be deleted or corrected.  You need to contact the credit bureau or the company or person who provided the incorrect information to the bureau.

  • Equifax: www.equifax.com/answers/correct-credit-report-errors/en_cp
  • Experian: www.experian.com/disputes
  • TransUnion: www.transunion.com/corporate/personal/creditDisputes.page

To contact the company or person who provided incorrect information to the bureau, look on your credit report, in an account statement, or on the company’s website for contact information for handling disputes.  

When disputing information on your credit report, you should:

  • provide your personal information including your name, address, date of birth, and Social Security number;
  • Identify specific details about the information being disputed and explain the basis of your dispute;
  • Have a copy of your credit report with the disputed information available; and
  • Provide supporting documentation, such as a copy of the relevant portion of the consumer report, a police report, a fraud or identity theft affidavit, or account statements

What happens once I send in information to correct information in my credit report?
If you submit the dispute through a credit bureau or directly to the company or person that provided the incorrect information to the bureau, your dispute may be investigated, typically within 30 days.  If you provide additional information during the 30 day investigation, it may extend an additional 15 days depending on the circumstances.  When the investigation is completed, either the credit bureau or company or person that provided the incorrect information must give you the written results of the investigation.

If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit bureaus to correct the information in your credit report.  You can get a free copy if your dispute results in a change.  The free report is in addition to your annual free report.  If an item is changed or deleted  a credit bureau cannot put the disputed information back into your credit report unless the company or person verifies that the information is accurate and complete.

You can request that the credit bureau send notices of any correction to anyone who received your report in the last 6 months.  A corrected copy can be sent to anyone in the last 2 years for employment purposes.

What if the investigation does not resolve my dispute?
If the investigation does not resolve your dispute, you can ask that a statement outlining the dispute is included in your future reports.  You can ask the credit bureau to provide your statement to anyone who received a copy of report in the recent past but you will have to pay a fee for this service.

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