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Safeguard Your Credit

April, 2011

Maybe you are applying for a mortgage and need to obtain financing through your local credit union for the loan? Maybe your automobile needs to be replaced and you need to apply for a car loan? How do these prospective lenders determine your credit worthiness? The lender requests that you consent to their obtaining a credit report. You provide your name, address, social security number and photo identification and the lender disappears into his or her office to obtain a copy of your credit report from one of the major credit reporting agencies.

A credit report lists your current and past creditors and provides a payment history. The lender can review this information to determine if you meet their specific loan qualifications. Your report may contain your credit score or “FICO” score, as developed by the Fair Isaac Corporation, which the lender will use as a basis to predict how likely it is that you will make your monthly payments on time. FICO scores range from 300 to 850. These credit scores affect your ability to get credit.  This score is also used to determine the terms of the loan as well as the interest rate you will be given for the particular loan. If you have a high FICO score, your interest rate will be lower than what would be offered to an individual who has a lower FICO score.

Under amendments to the Fair Credit Reporting Act, you can obtain a FREE credit report annually from each of the three nationwide agencies listed below:

Equifax: 1-800-685-1111
www.equifax.com

Experian: 1-866-200-6020
www.experian.com

TransUnion: 1-800-888-4213
www.transunion.com

You may also contact the Annual Credit Report Service, which is sponsored by Equifax, Experian, and TransUnion, at 1-877-322-8228, or complete an on-line application at www.AnnualCreditReport.com to request copies of your credit report from each of these agencies. Your report can vary between the agencies and it is recommended that you request reports from each of the three agencies.

It is very important that you remain cautious of agencies who claim to offer “free” credit reports, but lure you into purchasing additional services, which carry hidden monthly fees: i.e. monitoring your report on a monthly basis to discover identity theft. You may not be aware that by accepting the free credit report, you inadvertently signed-up for these additional services. Many consumers do not carefully review their monthly credit card invoices and do not realize that their account has been charged a monthly fee. You may visit the Federal Trade Commission’s website at ftc.gov and follow their link for “Free Annual Credit Reports,” to review additional information with regard to free credit reports to insure that the report you receive is actually free.

It is recommended that you obtain your credit report(s) at least once a year and that you carefully review the information listed on the report(s). If you dispute an item on your credit report, the following steps should be taken:

 

 

  1. Contact the reporting agencies directly. (Equifax, Experian and TransUnion)  Explain that you are disputing an item on your credit report.  If available, send them proof to support your position that the entry is inaccurate.
  2. Contact the original creditor. Once you report the disputed item to the three major credit reporting agencies, they will contact the creditor.  However, it is a good idea for you to alert the original creditor that you are disputing the debt and that you would like them to accurately report the status of the matter to the three agencies.
  3. If Equifax, Experian and TransUnion are unable to correct the item on your credit report, prepare a statement explaining that the item is in dispute and why, and send it to the agencies requesting that they list this personal statement on your credit report.
  4. Document all of the action you have taken.  Write down the names and titles of the people you have spoken to, as well as documenting the date and time of calls.  Keep copies of all correspondence for future reference.
  5. Request that Equifax, Experian and TransUnion send you an updated copy of your credit report once the item in dispute is corrected.


Your credit follows you throughout your lifetime. Mistakes on your credit report can affect your credit score and your ability to receive credit. Pay careful attention to your credit report to insure accurate reporting.

 

 

   
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