How do the reporting agencies get their information?
They get their information from your creditors. When you borrow, pay, or retire a loan, it is reported. This includes your department store, bank, and of course, credit card company.
Do the reporting agencies make the lending decision?
Simply, no. They only provide the information to interested parties that will make a lending decision (or hiring, insuring, bonding, etc.)
Why get a copy of your credit report?
It is not the responsibility of the reporting agency to keep accurate and up-to-date information on you. Therefore, to avoid unwanted outcomes, it is best to know how lenders see you.
Another reason to view your credit report is to check for identity theft. You don't want someone obtaining credit in your name and leaving you with the debt.
How do errors happen?
It can be as simple as a misspelling or wrong birth date and your credit report can be affected. A wrong address, due to marriage, death, relocation, can also cause problems. In addition, the more activity on your report, the greater a chance for error. Mistaken identity, out-of-date information, and inaccuracies can mean the difference between a loan approval and rejection.
I found an error. Now what?
Contact the credit reporting agency as soon as possible. If they cannot verify the disputed information, it will be removed from your credit report. A corrected report will be sent to the parties you want who received it within the past 6 months (or 2 years for employment purposes).
What if the reporting agency doesn't change anything?
It is your right to present your side of the dispute in a brief statement. The credit reporting agency must attach this to your credit report. Anyone requesting a copy of your credit report automatically receives your statement (or a summary or abbreviation of it) UNLESS the reporting agency considers the dispute irrelevant or frivolous.
What can I do if denied credit due to my credit report?
If a lender denies you credit because of your credit report, they must give you the name, address, and phone number of the credit reporting agency that provided the credit report information. Then, you have 60 days to request a free credit report. Most credit reporting agencies give consumers copies of their credit reports. A few may disclose only in person or by telephone.
The credit reporting agency must let you know the nature and substance of ALL information on your credit report. They must tell you the information source and recipients for the previous year (2 years for reports for employment reasons).
How long does credit activity stay on my report?
The credit reporting agency must AUTOMATICALLY DELETE information on adverse credit activity that is more than 7 years old. For bankruptcies, it is 10 years.
These rules do not apply for information when...
- credit transactions exceed $150,000,
- underwriting life insurance that exceeds $150,000, or
- employment that pays more than $75,000 or more.
How do I get a copy of my credit report?
Write or call any of the major credit reporting agencies.
They need your name, address, telephone number, any previous addresses (for the last 5 years), your Social Security Number, and your date of birth. If married, be sure to include the same information for your spouse.
This is at no charge if you have been denied credit in the first 60 days of receiving a denial notice. Also, you are entitled to receive a free report from each of the major credit reporting agencies every 12 months.