Have you been turned down for a loan recently? Have you applied for store credit and been refused? Did you really want that car and find out that because of your 'credit score' that they would have to require an unreasonable down payment? Credit reports are designed to help businesses evaluate
risk factor in giving you money or valuable products on a line of credit.
The Fair Credit Reporting Act promotes accuracy, fairness and privacy of information in files of nation's credit reporting agencies. The act is enforced with regard to consumer's rights and requiring new responsibilities for credit reporting agencies.
For example, a reporting agency must give you a copy of your report and they must provide a list of every inquiry about your credit report within last year.
The agencies collect data on personal identification (name, address, social security number, current employer, etc), payment histories with all current and closed lines of credit that details how much you owe, when you've paid on time and what, if any have been reported to a collection agency.
The final two items are all inquiries that have been made on your credit report as well as anything that is considered a matter of public record such as bankruptcies, foreclosures and tax liens.
To repair or report errors on your credit report, you must obtain a copy of your personal report and score. The reports themselves are not uniform from company to company.
Experian may not list all data of Equifax and vice versa. So, be sure to obtain credit history reports from same company as creditor who turned down your application. In some states, that may require a small fee, but after September 1, 2005 all states will have to be in compliance with providing a free credit report.
Once you have report, verify information. Every report is also scored. Scoring is system that creditors use to determine your credit experience. These scores are valid for all three companies and are uniform in value.
Credit scores range from 375 to 900 points, but those numbers mean little on their own. A score of 650 or better usually indicates a very good credit history. Scores between 620 and 650 are considered average, while scores below 620 may prevent a person from getting a loan. If they do receive one, it is likely one with prohibitive interest attached.
If you look at all information on your credit report and it's correct, then you are faced with having to improve either your payment history, lower number of debts.
If score is low because you possess very little credit history, investing in a secured credit card can help generate good feedback to your credit report or a co-signer who can provide creditor with a good credit history as security for your lack of one.
Inaccurate information, however, such as reported late payments that you disagree with or a listing for a debt that is not yours is repairable. Some companies offer debt consolidation or credit repair. Before getting involved with either type, be sure you thoroughly check out company to avoid scams.
