Building A Better Credit Report - HSH.com

[Pages:24]BUILDING A BETTER CREDIT

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REPORT

FEDERAL TRADE COMMISSION TOLL-FREE 1-877-FTC-HELP

FOR THE CONSUMER

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BUILDING A BETTER CREDIT REPORT

If you've ever applied for a credit card, a personal loan, or insurance, there's a file about you. This file is known as your credit report. It is chock full of information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses with a legitimate need for it. They use the information to evaluate your applications for credit, insurance, employment, or a lease.

Having a good credit report means it will be easier for you to get loans and lower interest rates. Lower interest rates usually translate into smaller monthly payments.

Nevertheless, newspapers, radio, TV, and the Internet are filled with ads for companies and services that promise to erase accurate negative information in your credit report in exchange for a fee. The scam artists who run these ads not only don't deliver -- they can't deliver. Only time, a deliberate effort, and a plan to repay your bills will improve your credit as it's detailed in your credit report.

The Federal Trade Commission (FTC), the nation's consumer protection agency, has written this booklet to help explain how to build a better credit report. It has six sections:

SECTION 1

explains your rights under the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act.

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tells how you can legally improve your credit report.

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offers tips on dealing with debt.

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cautions about credit-related scams and how to avoid them.

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offers information about identity theft.

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lists resources for additional information.

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THE FAIR CREDIT REPORTING ACT

The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of infor-

mation in the files of the nation's consumer reporting companies. The FTC enforces the FCRA

with respect to consumer reporting companies. Recent amendments to the FCRA expand

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consumer rights and place additional requirements on consumer reporting companies. Busi-

nesses that provide information about consumers to consumer reporting companies and busi-

nesses that use credit reports also have new responsibilities under the law.

Here are some questions consumers have asked the FTC about consumer reports and consumer reporting companies, and the answers.

Q. DO I HAVE A RIGHT TO KNOW WHAT'S IN MY REPORT?

A. You have the right to know what's in your report, but you have to ask for the information. The consumer reporting company must tell you everything in your report, and give you a list of everyone who has requested your report within the past year -- or the past two years if the requests were related to employment.

Q. WHAT TYPE OF INFORMATION DO CONSUMER REPORTING COMPANIES COLLECT AND

SELL?

A. Consumer reporting companies collect and sell four basic types of information: O Identification and employment information: Your name, birth date, Social Security number, employer, and spouse's name are noted routinely. The consumer reporting company also may provide information about your employment history, home ownership, income, and previous address, if a creditor asks. O Payment history: Your accounts with different creditors are listed, showing how much credit has been extended and whether you've paid on time. Related events, such as the referral of an overdue account to a collection agency, also may be noted. O Inquiries: Consumer reporting companies must maintain a record of all creditors who have asked for your credit history within the past year, and a record of individuals or businesses that have asked for your credit history for employment purposes for the past two years. O Public record information: Events that are a matter of public record, such as bankruptcies, foreclosures, or tax liens, may appear in your report.

Q. IS THERE A CHARGE FOR MY REPORT?

A. Under the Free File Disclosure Rule of the Fair and Accurate Credit Transactions Act (FACT Act), each of the nationwide consumer reporting companies -- Equifax, Experian, and TransUnion -- is required to provide you with a free copy of your credit report once every 12 months, if you ask for it.

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Q: HOW DO I ORDER MY FREE REPORT?

A: The three nationwide consumer reporting companies are using one website, one toll-free

telephone number, and one mailing address for consumers to order their free annual

report. To order, click on , call 1-877-322-8228, or com-

plete the Annual Credit Report Request Form and mail it to: Annual Credit Report

Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on page six;

or you can print it from credit. Do not contact the three nationwide consumer

reporting companies individually. You may order your free annual reports from each of

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the consumer reporting companies at the same time, or you can order from only one or two. The law allows you to order one free copy from each of the nationwide consumer

reporting companies every 12 months.

Q: WHAT INFORMATION DO I HAVE TO PROVIDE TO GET MY FREE REPORT?

A: You need to provide your name, address, Social Security number, and date of birth. If you have moved in the last two years, you may have to provide your previous address. To maintain the security of your file, each nationwide consumer reporting company may ask you for some information that only you would know, like the amount of your monthly mortgage payment. Each company may ask you for different information because the information each has in your file may come from different sources.

Still, is the only authorized online source for your free annual credit report from the three nationwide consumer reporting companies. Neither the website nor the companies will call you first to ask for personal information or send you an email asking for personal information. If you get a phone call or an email -- or see a pop-up ad -- claiming it's from (or any of the three nationwide consumer reporting companies), it's probably a scam. Don't reply or click on any link in the message. Instead, forward any email that claims to be from (or any of the three consumer reporting companies) to spam@, the FTC's database of deceptive spam.

Q: ARE THERE OTHER SITUATIONS WHERE I MIGHT BE ELIGIBLE FOR A FREE REPORT?

A: Under federal law, you're entitled to a free report if a company takes adverse action against you, such as denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You're also entitled to one free report a year if you're unemployed and plan to look for a job within 60 days; if you're on welfare; or if your report is inaccurate because of fraud, including identity theft. Otherwise, any of the three consumer reporting companies may charge you up to $9.50 for another copy of your report within a 12-month period.

TO BUY A COPY OF YOUR REPORT, CONTACT:

Equifax 800-685-1111

Experian 888-EXPERIAN (888-397-3742)

Trans Union 800-916-8800

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Under state law, consumers in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont already have free access to their credit reports. For more information, see Your Access to Free Credit Reports at credit.

YOUR ACCESS TO FREE

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CREDIT REPORTS

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CREDIT SCORES

Q. WHAT IS A CREDIT SCORE, AND HOW DOES IT AFFECT MY ABILITY TO GET CREDIT?

A: Credit scoring is a system creditors use to help determine whether to give you credit, and how much to charge you for it.

Information about you and your credit experiences, like your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical formula, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor. A total number of points -- a credit score -- helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments on time. Generally, consumers with good credit risks have higher credit scores.

You can get your credit score from the three nationwide consumer reporting companies, but you will have to pay a fee for it. Many other companies also offer credit scores for sale alone or as part of a package of products.

For more information, see Credit Scoring at credit.

CREDIT SCORING

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Annual Credit Report Request Form

You have the right to get a free copy of your credit file disclosure, commonly called a credit report, once every 12 months, from each of the nationwide consumer credit reporting companies - Equifax, Experian and TransUnion. For instant access to your free credit report, visit .

For more information on obtaining your free credit report, visit or call 1-877-322-8228. Use this form if you prefer to write to request your credit report from any, or all, of the nationwide consumer credit reporting companies. The

following information is required to process your request. Omission of any information may delay your request. Once complete, fold (do not staple or tape), place into a #10 envelope, affix required postage and mail to:

Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281.

Please use a Black or Blue Pen and write your responses in PRINTED CAPITAL LETTERS without touching the sides of the boxes like the examples listed below:

A B C D E F G H I J K L MNO P Q R ST U VWX Y Z 0 1 2 3 4 5 6 7 8 9

Social Security Number:

-

-

6

Fold Here

Date of Birth:

/

/

Month

Day

Year

Fold Here

First Name

M.I.

Last Name

Current Mailing Address:

JR, SR, III, etc.

House Number

Street Name

Apartment Number / Private Mailbox

For Puerto Rico Only: Print Urbanization Name

City

State

ZipCode

Previous Mailing Address (complete only if at current mailing address for less than two years):

House Number

Street Name Fold Here

Fold Here

Apartment Number / Private Mailbox

For Puerto Rico Only: Print Urbanization Name

City

Shade Circle Like This > Not Like This >

I want a credit report from (shade each that you would like to receive):

Equifax

Experian

TransUnion

State

ZipCode

Shade here if, for security reasons, you want your credit report to include no more than the last four digits of your Social Security Number.

If additional information is needed to process your request, the consumer credit reporting company will contact you by mail.

Your request will be processed within 15 days of receipt and then mailed to you. Copyright 2004, Central Source LLC

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