Frequently Asked Questions


The Fair Credit Reporting Act is the federal law that outlines your legal rights as a consumer when dealing with the credit reporting agencies, credit repair services, and other aspects of dealing with debt.  You can access the FCRA through the Federal Trade Commission’s website at http://www.ftc.gov/os/statutes/fcrajump.shtm.

You can, but it does take a considerable amount of effort.  If you are the victim of identity theft, or just the fighting to fix an honest mistake to your credit history, you can challenge the negative items on your credit report for which you are not responsible.  You’ll need to write letters, provide proof that you aren’t responsible for the debts, and be able to follow-up on your requests.  However, if you are uncomfortable with writing business-like letters or conducting the bureaucratic investigations needed to track down the errors or frauds, you may very well wish to hire a professional.

If the damage to your credit is due to your own financial problems, you can still take all the steps needed to pay off negative credit items while building positive entries on your own.  However, consulting with a debt counselor, debt settlement negotiator, or similar professional can go a long way towards helping you turn around your financial situation.

Contact the source of the bad information (the lending institution, for instance) and the reporting bureaus through certified mail.  The reporting bureaus are required to investigate the error within 30 days and report back to you on their findings.

Only with your written consent; however, perspective employers may make your consent a requisite to hiring.

Creditors, insurers, employers, and other businesses that have a legitimate need to evaluate your credit history in order to consider your applications for credit, insurance, employment.  Also, landlords may ask to see your credit report when you apply to rent a home.

Here is a list of some credit issues and how long they remain on your credit report:

  • Tax Liens:  Paid – 7 years; Unpaid – 15 years.
  • Bankruptcy: 10 years.
  • Charge-Off Accounts: 7 years
  • Closed Accounts: 7 years
  • Collection Accounts: 7 years
  • Inquiries: 1 to 2 years

The good news is that positive items last for just as long, and can act to counterbalance the negative entries to improve a credit score.

All three of the major credit reporting agencies, TransUnion, Experian, and Equifax, are required to provide you with a copy of your credit report once a year.  According to the Federal Trade Commission, there are several ways to acquire your credit reports:

  • Visit annualcreditreport.com
  • Call 1-877-322-8228
  • Complete the an Annual Credit Report Request Form (available from ftc.gov/credit.)

The FTC says that you should not contact the three reporting agencies individually.

Note: Beware of counterfeit websites that attempt to present themselves as annualcreditreport.com with misspelled URLs, but are actually enterprises looking to take your money.

In general credit scores are based on these values:

  1. Payment History.  An assessment of how you are at paying your bills on time.  Late payments hurt your credit score.
  2. Debt/Credit Limit Ratio.  How much debt you are carrying compared to how much credit is available to you.  It hurts your credit score if you are close to being maxed-out on your credit limits.
  3. Length of Credit History.  For how many years have you engaged in credit activity?  Are you a college student with your first credit card, or do you have a history of cards, loan, mortgages and other transactions?
  4. Types of Credit Accounts.  How many credit cards do you carry?  Are there mortgages, car loans, or other credit accounts on your record?
  5. Inquiries.  How often do you apply for credit?  Each time you do an inquiry is sent to the companies that maintain credit reports.  An excessive number of inquiries are viewed negatively.

 

There are three main agencies to whom lenders and other financial institutions report credit activity: TransUnion, Equifax, and Experian.  These are the “Big 3 Credit Reporting Bureaus.”  They compile the information provided to them, maintain a record of consumers’ credit histories, and calculate a “Credit Score” based on the accumulative negative and positive values of each entry.  Each of the three bureaus maintain independent records, so the information they have may not be identical.

Equifax Information Services
PO Box 740241
Atlanta, GA 30374
1-800-685-1111
www.equifax.com

Experian Consumer Assistance
(Call for mailing address for your state)
1-888-397-3742
www.experian.com

TransUnion
PO Box 1000
Chester, PA 19022
1-800-888-4213
www.transunion.com

 

“Credit repair” may sound like a generic phrase that covers all elements of credit troubles, but it actually refers specifically to fixing (repairing) mistakes in your credit report that can have an adverse affect on your credit score; as well as taking action to improve your credit score in the face of negative items that are legitimate – such as bankruptcies, charge-offs, missed payments, etc.

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