Get The Scoop On Your Credit Report
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What's in it, and why you should care.Joe and Jenny were very excited about buying their first house. They had saved for a down payment, decided on the perfect neighborhood and found a wonderful REALTOR® to guide them to the home of their dreams. But when they applied for a mortgage the bank turned them down, saying they had too much available credit and too many late payments.
Jim had a stressful experience when he tried to buy a new car. At the last minute, he was told he didn't qualify for a loan because he had declared bankruptcy three years ago. Jim, who is single, was also told that his "wife" had a recent criminal conviction and his mortgage payments were three months in arrears. This was all news to Jim, who had no wife, no mortgage payment - and now, unfortunately, no new car.
How do these things happen? How do financial institutions find out all this information? And what can you do if their information is wrong?
Your financial history is constantly being tracked by at least three major credit bureaus: Equifax, TransUnion and Experian. These companies store all kinds of information, and share it with other companies including financial institutions, insurance companies and employers.
What kind of information is included in my credit report?- Any credit that has been extended to you in the past seven years, even open lines of credit that you do not currently use;
- Bankruptcy information, which is held for 10 years;
- Your repayment history, including which payments were late and how late they were made;
- Information on arrests and criminal convictions
Joe and Jenny ran into trouble because they had several open lines of credit, totaling tens of thousands of dollars. Even though they had not actually borrowed large sums of money, the bank saw this as a potential drain on their budget, especially considering their less-than-perfect payment history, and rejected their mortgage application.
How can I get a copy of my credit report?You should check your credit history about six weeks before applying for a car loan, mortgage or job. In fact, it’s a good idea to get a copy of your credit report about once a year so you can check it for accuracy. If Jim had done this, he could have straightened out his "identity crisis" before applying for a loan.
To obtain a copy of your credit report, call all three credit bureaus or apply through their web sites:
Equifax(800) 685-1111
TransUnion(800) 888-4213
Experian(888) 397-3742
If you have been denied credit, employment or insurance within the past 60 days, you are entitled to a free report. Otherwise there is a small charge.
What if I find a mistake?If your credit report contains errors, write a letter to the credit bureau and also to the company or lender that made the mistake. Include copies of documents that support your claim. Send both letters by certified mail, return receipt requested, and keep copies for your records. It may take time, patience and persistence to straighten out mistakes on your credit report. But in the long run, it’s well worth the effort.
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