Last week we talked a little about how the Fair Credit Reporting Act entitles you to copies of your credit history.
Some folks may wonder what exactly is included in a credit report.
What’s a credit report?
Most financial transactions – including auto and mortgage loans, credit cards and unpaid bills – make up your credit history. Lenders and businesses that extend you a loan or line of credit, inform one or more of the large credit reporting agencies of your payment history.
This information forms your credit report and can remain on your record for anywhere from seven to ten years.
To get a copy of your credit record, call Experian at 1-800-392-1122, or Equifax at 1-800-851-2674 or Trans Union at 1-800-888-4213.
There is an $8 charge for the report. But if you’re unemployed or low income you may be eligible for a free report.
Even if you know you have excellent credit, it’s a good idea to occasionally check what their records say. Mistakes do happen and if there’s an error on your credit report it could harm your ability to get a loan.
Correcting your credit report
If you discover errors in your credit report, you should correct them as soon as possible.
Contact each business that made an inaccurate entry and ask them to retract it. If they refuse, contact the credit reporting agency or agencies and tell them that you dispute the entry. Offer any documentation you may have to validate your claim.
By law, the credit-reporting agency must include your objection in the credit report. If you find serious errors or encounter difficulty in fixing these discrepancies, consider contacting a non-profit credit-counseling agency for advice.
Here at Aberdeen Neighborhood Housing Services, Royce Travis can help you do just that at no cost.
Right now the Federal Trade Commission says that it’s common for problems to take up to six months to resolve, although each of the big three agencies is working to make sure that they handle all disputes within 30 days.
Once the dispute is resolved, the credit reporting agency/agencies will send you an updated report.
Improving your credit report
But, if your credit report accurately shows that you haven’t been paying your bills on time, or not at all, you must change your ways – and soon in order to rebuild your credit.
Royce says to pay any past due accounts immediately and begin establishing a good credit record by paying all your bills on time.
If you’re having trouble doing that, then talk to Royce about budgeting/money management help. That is free of charge too.
What if you’ve fallen on bad luck?
As soon as you realize you may fall behind on your bills call your creditors immediately.
Creditors are anxious to recover their debt and are usually willing to work with you to figure out a new payment schedule if you’ve lost income because of an unforeseen incident (such as divorce, loss of job, illness).
As an example, even if your ex-spouse was given the joint bills in a divorce action, if he/she fails to make payments on those accounts, it still may reflect on your report. You may have to pay off those bills to maintain your good credit standing. (The same rule applies to co-signers.)
Explain the situation honestly and briefly and let them know you intend to pay off the debt, but need to work out reduced or modified payments terms. Then, make sure to honor the new agreement and make those payments on time.
Do not wait until the creditors are calling and sending you nasty letters.
Beware: Credit Repair Companies
There are some companies that claim to be able to "remove derogatory information from your report" for a fee. Remember this: The only way to have information removed from your report is if the information has been reported erroneously. And you need not pay for this service as it can be accomplished with free help from Aberdeen Neighborhood Housing Services.
Only you, with consistent payments and time can repair your credit.
Dave Murnen and Pat Beaty are construction specialists at Aberdeen Neighborhood Housing Services, a non-profit organization committed to creating safe and affordable housing for all residents of Grays Harbor County. Do you have questions about home repair, remodeling or becoming a homeowner? Call us at 533-7828, write us at P.O. Box 407, or visit us at 710 E. Market St. in Aberdeen.
