How Healthy Is Your Credit

How Healthy Is Your Credit

There’s only one way to discover the “health”
of your credit. You need to examine your credit
report. Your credit report is your “consumer
identity” that potential lenders will use to judge your
credit worthiness.

Use these tips to give your credit profile the
“tune-up” it needs for 2004.

Tip #1- Check for Errors
Your credit report or profile is more than just a
collection of who your creditors are and how much
you owe them or have paid them.

The first thing you need to do is carefully check that
your credit report is accurate. Nearly 70% of credit
reports contain errors.

These errors may be as simple as an incorrect
middle initial or address. Or it could be as serious
as a creditor reporting that you were late with a
payment when in fact you were not late at all.

This error might not seem like a big deal to you. However,to a future lender like a mortgage company it makes a big difference !

Carefully examine your credit report and if you find an
error contact your creditor and the credit bureaus. Catch
and correct these errors now before it hurts your chances
of securing credit in the future.

Tip #2 – Correcting Errors
The two most common errors contained in credit reports

1) wrong account information

2) incorrect recording of late payments.

If you find an account reported that does not belong you,
you need to contact the credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft.

Hopefully you’ll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when they report an account belonging to a family member or someone with a similar name on your credit report.

If your problem is an error in reporting a late payment
you will need proof to back up your case before this error
can be corrected or removed. The most common error occurs when a payment is reported as “late” when it was actually a current or “on time” payment.

In either case, the problem can and should be corrected.
You will need to correct the error in writing. Keep a journal or log of all calls and correspondence.

The Fair Credit Reporting Act (FCRA) requires the credit
bureaus and the agency reporting the information to the
credit bureau to correct inaccurate information in your
credit report. Therefore, it is important that you contact
both the credit bureau and the creditor whose information is in dispute.

A sample letter is included here to help you in correcting
your credit profile. Make sure that you clearly identify the information that you dispute, include copies of receipts or documents that support your position. Then request that the information be corrected or deleted from your file.

Send your letter by certified mail and request a return receipt from the recipient. Keep all correspondence that you mail out. Give the agencies involved 30 days to begin their investigation. You can call them but be aware that phoning them does not protect your consumer rights! You must notify them in writing to protect your rights.

They must notify you of the results of their investigation.
Although the process will take time, it’s important to do it. This is your credit profile, your “consumer identity” that is at stake. Don’t expect an error to correct itself.

At your request, the credit bureaus must send notices of
corrections to your credit profile to anyone who has requested your report in the last six months. If you applied for a job and were turned down because of inaccurate information in your credit report, you can have the corrected report mailed to anyone who received a copy in the past two years.