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Keeping Your Credit History on Track


As you know, a good credit history is an important part of your financial future. It attests to more than just your ability to pay bills on time, and it can play a pivotal role in getting a new job or moving into a new home.

Your Past Reflects Your Future Your credit report does more than track your credit and how you pay your bills. It represents your financial profile, and it can affect more than just your ability to obtain additional credit.

Many lenders and employers check your credit rating as an indication of your personal as well as your financial character. Landlords, auto financing companies, insurance companies-a large number of entities can legally review your credit report before deciding to do business with you.

In most cases, they are simply verifying the information you have already provided. Keep in mind that only your name and address, or name and social security number, accompanied with a signature are required to pull your report. And since credit bureaus are not required to notify you when someone has requested a report, it's to your advantage to have your credit in sterling shape all of the time.

Keep Up the Good Work The easiest way to keep your credit rating strong is to use your credit, pay your bills on time, and avoid reaching your limit. Always make at least the minimum payment required and complete all new applications carefully, using the same name each time.

Stay in Contact With Your Creditors If you change your address, notify your creditors as soon as possible to avoid losing bills in the mail or receiving them past your payment due date. Should you have difficulty meeting your financial obligations, call your creditors. They will want to work with you to figure out a reasonable payment plan.

Be Wary of Quick Fixes for Credit Problems Financial information about late payments, foreclosures, and prepossessions remains on your report for up to seven years; bankruptcy information, for up to ten years.

Certain companies advertise that they can "fix" a bad history, usually for a large sum. HOWEVER, ALTERING AN ACCURATE CREDIT HISTORY IS LEGALLY IMPOSSIBLE.

If you find yourself in trouble, work with your creditors instead to reestablish a credit rating you'll be proud to have.

Know the Facts About Credit Bureaus Credit bureaus are independent agencies that collect credit information and distribute it to potential lenders. Although other agencies exist, the three national bureaus listed below handle the largest share of inquiries and reports.

A number of laws regulate credit bureaus and protect your rights. For more information, contact your regional Federal Trade Commission or write to:

Federal Trade Commission 600 Pennsylvania Ave, NW Washington, DC 20580 (202) 326-2222

Start by pulling your credit reports from all three major credit bureaus: Equifax, Experian and TransUnion You're enti­tled to free reports from each of the bureaus once a year under federal law by calling (877) 322-8228 or visiting the bureaus central website, at www.annualcreditreport.com. (If you've already had your free look for the year, you can order copies individually from the bureaus, typically for $8 to $9, or you can order your reports and FICO score~ from all three bureaus for about $45 from www.myfico.com.)

With your reports, you'll be given instructions on how to dispute errors. With any luck, the erroneous entries will disappear. If not, you'll have to take your fight directly to the collection agency. Send a letter certified mail, return receipt requested, informing the agency that this is not your debt and demanding that it “validate” the account, which means the agency must provide proof that you owe the money and that it is entitled to collect the debt. If it's not your debt, the collection agency won't be able to provide such proof and the entry should disappear.

It's also possible, although less likely, that you're the victim of identity theft. In that case you might want to check out the Identity Theft Resources Center at www.idthejtcenter.org. Typi­cally, an identity thief will open more than one bogus account and you would find plenty of other errors, collections and de­linquencies in your report.

Don’t rest until you've resolved this issue. A 683 score may not seem all that bad, but more than half of American adults have FICO scores over 700, and you typically need a score of 720 or above to get the best rates and terms. The score you have now, could cost you thousands of dollars of unnecessary interest should you need a loan.

Equifax P.O. Box 105873 Atlanta, GA 30348 1-800-685-1111

Experian P.O. Box 2104 Allen, TX 75013-2104 1-800-392-1122

Trans Union P.O. Box 390 Springfield, PA 19064-0390 (312) 408-1400

Once you receive a copy of your credit report, check it for errors. Under federal law, you have the right to have any incomplete or inaccurate information corrected by a credit bureau at no charge. To correct an error, follow these two steps:

1. Inform the credit bureau of the problem in writing within 30 days of receiving your report. (The bureau is legally obligated to correct the error and will usually reinvestigate the disputed information by going to the source of the information.)

2. If the bureau fails to correct the error to your satisfaction, you can send the bureau a written statement of no more than 100 words explaining the situation. Provide photocopies or other proof to support your claim.

In many instances, the bureau must show this statement with any future reports that include the disputed information.

#CreditHistory #CreditBureaus

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