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The Nine Most Commonly Asked Questions About Credit Reports

1. Why did you turn down my request for credit?

Credit reporting agencies do not recommend that your credit application be accepted or rejected. Credit grantors make that decision based on your payment record and their own established criteria.

2. How can I correct a mistake?

Give the reporting agency specific details regarding the information you believe is incorrect. They will check with the credit grantor, collection agency, or the public record source to see if any error has been reported. Information that cannot be verified should be removed from your file. If you and a credit grantor disagree on any source of information, you will need to resolve the dispute directly with the credit grantor who is the source of the information.

3. What if I still disagree with an item after it has been verified?

For those items in your credit file which you feel deserve further explanation, you may send a brief statement (not to exceed 100 words) to the credit reporting agencies. The information will be placed on your credit file and will be disclosed each time your credit file is accessed.

4. What is in my credit file that keeps me from obtaining credit?

Each credit grantor has established criteria for making credit decisions. Your credit may appear to be perfect, but not having enough established credit or having too many outstanding balances are several examples of why your request for credit may be declined. Sometimes the decision is not even based directly on the credit file; or instance, you may not have lived at your residence or in your present job long enough. If you have questions about why you were not approved for credit, contact the credit grantor who turned you down for credit and ask for an explanation.

5. Why is employment outdated?

Some employers do not regularly update this information. What is listed as your current employment is actually the last employment reported to the credit reporting agency by credit grantors. This information is not typically used by credit grantors, or employers in making their decision, but for demographic purposes.

6. Why isn’t my income shown?

The information kept to help credit grantors process credit applications include your personal identification, the timeliness in which you have paid your bills (as reported by your creditors), whether you have filed for bankruptcy, and if you have or had a tax lien or a judgment recorded against you. Credit grantors usually have their own sources for verifying income.

7. If I do have credit problems, is there some place where I can get advice and assistance?

Maybe. The Consumer Credit Counseling Service (CCCS) is a non-profit organization that offers free or low-cost financial counseling to help people solve their financial difficulties. CCCS can help you analyze your situation and work with you to develop solutions. There are more than 600 CCCS offices throughout the country. Check your phone directory to get the telephone number for the office nearest you.

8. Should I use one of those companies that promises to help "fix" my credit?

No! These companies cannot have accurate information removed from your credit file. There is nothing they can do for you that you cannot do yourself.

9. Where can I get more information?

Free information is available on subjects such as "Building a Better Credit Report"; "Credit and Divorce"; "Credit Billing Errors"; "Fair Credit Billing"; "Fair Credit Reporting"; "Fair Debt Collection"; "Fix Your Own Credit Problems"; and "Women and Credit Histories" to name a few. You can contact the Federal Trade Commission, Public Reference Section, 6th and Pennsylvania Ave. N.W., Room 130 Washington, DC 20580. (Your local library also has information in the consumer reference area of the library. Ask your librarian for assistance.)

Web address www.ftc.gov/bcp/menus/consumer/credit.shtm

Adding Accounts To Your File

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to credit agencies. Those not reporting to credit reporting agencies may include some travel, entertainment, and gasoline companies, local retailers, and credit unions. If you have been told that you were denied credit because of an "insufficient credit tile" or "no credit file", and you have accounts with creditors that do not appear in your file, you can ask the credit reporting agency to add this information to future reports. Although they are not required to do so, many credit agencies will add other verifiable accounts for a fee.

Have You Seen Your Credit Report Lately?

How long has it been since you looked at a copy of your credit report? Several years ago? Ten years ago? Financial experts suggest that you review your credit report annually from all three major credit reporting agencies because all three companies may gather and report different information.

Your credit report contains important financial information about you. It generally includes facts about where you work and live as well as your bill paying habits. It may also state whether or not you’ve been sued, arrested, or have filed bankruptcy. Companies called credit reporting agencies or credit bureaus compile and sell your credit report to businesses, who then use it to evaluate your application for credit, insurance, employment, and other purposes allowed by federal law. Therefore, it is important to check your credit reports before considering any major purchase.

Today, many companies also use "credit scores" to determine your credit worthiness. Credit scores are a non-subjective, numeric analysis of your credit worthiness. Each of the three reporting agencies use their own rating formulas. The formulas used are similar but not exact duplicates. There are many levels of credit scores. The better credit scores are 680 and above. While credit scoring alone does not decide your credit worthiness, it is a strong influence among many prospective credit grantors, especially investors.

To find out your credit scores, the credit report must be ordered and obtained. Once your credit report is obtained, then I as a mortgage professional can assist you in finding the best mortgage program that fits your personal credit worthiness. With the variety and number of investors available, who all offer different loan programs to a mortgage broker, most consumers with even fair or good credit can obtain a home loan today. (Note: Higher interest rates may be necessary for consumers with lower credit score reports.)

This report courtesy of

Jerry Johnson

REMAX associates plus, inc.

651.415.3235

Jerry@JerryJohnson.com

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