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Archive for March, 2012

The fair credit reporting act is a law that oversees all aspects of consumer information, including consumer credit information. It was enacted in 1970, and then amended in the late 1990s and again in 2003, with the ultimate purpose to protect and promote accuracy, fairness, and the privacy of personal information assembled by credit reporting agencies, otherwise known as credit bureaus.

The fair credit reporting act contains numerous rules that are aimed at protecting consumers by requiring credit bureaus to do a number of different things. The following list is not an exhaustive list of all of the requirements, but it covers many of the main parts.

• Disclose your credit file to you upon request. Credit bureaus must provide information in your credit file if you request it, provided you can provide proper identification. Consumers are allowed one free credit report per year, or thirty days after they have been declined for credit.

• Limit access to your information. Credit bureaus may not provide your credit report to any institution that lacks a legitimate purpose, such as credit underwriting for a loan, credit, service, or employment. Other purposes could include several business and legal uses.

• Get your consent before providing your information to an employer. A credit bureau may not provide credit information to an employer or potential employer unless you first give that employer written permission to request your credit report.

• Investigate disputed information. If you tell a credit bureau that your file contains inaccurate information, the agency must immediately investigate the matter with the creditor that provided the information. If the subsequent research fails to resolve your dispute, you may add a statement to your credit file to serve as explanation of the matter.

• Correct or delete inaccurate information. A consumer reporting agency must correct or, as the case may be, delete from your credit file the information that is found to be inaccurate or can no longer be verified. The consumer reporting agency is not required to remove accurate data from your file unless it is outdated.

• Delete outdated information. In general, negative information that is more than 7 years old (10 years for bankruptcies) must be removed from your file.

• Remove your name from marketing lists upon request. Consumer reporting agencies can provide lists of consumer names and addresses whose credit information matches the requirements of creditors and insurers for making firm offers of credit or insurance to the consumers on the list.

• Disclose your credit score to you upon request. You have the right to request a credit score about you.

• Add identity theft and active duty alerts. Identity theft victims may place fraud alerts and active duty military personnel serving away from their regular duty station may place “active duty” alerts to help prevent identity theft.

• Remedying the Effects of Identity Theft. If you are, or believe that you are, the victim of identity theft, you have specific rights under the FCRA. These rights will help you deal with the effects of identity theft.

There is a lot of protection offered by the fair credit reporting act to ensure that consumers are protected against fraud activities and credit reporting inaccuracies. This allows consumers at least a certain level of protection against these types of issues. Even in the event of something showing up on a consumer’s credit file, the fair credit reporting act gives remedies for addressing them in a structured manner.

The fact is that your credit history is important, and any negative information can have a drastic impact on your life. If the fair credit reporting act didn’t exist, consumers will be completely at the mercy of credit bureaus. Without any legal requirements, they would most likely not be inclined to work on ensuring that inaccuracies are removed. Instead, since the act does exist, consumers can rest assure that there is a level of security with regards to their credit information.

There is plenty of other information within the pages of the fair credit reporting act and the list above by no means represents the full list. It is intended to give you an idea as to the lengths that consumers, and their financial information, is protected.

There are 3 major credit bureaus that serve as the primary source of financial and other credit information about consumers. They are Experian, Equifax, and TransUnion. These credit bureaus are responsible for collecting this information, and compiling it into a useable form for creditors. This compiled report is referred to as a credit report. Under federal law, a consumer is allowed to access a copy of their report free once per year. In addition, they are allowed access to one if they have been denied credit within the past thirty days based on information contained in their credit report.

Functions of the Credit Bureaus

Of the 3 major credit bureaus, Equifax is the oldest. Information such as payment histories, loan balances, and any other debts are available for by financial institutions, utility services, and any other creditor. The credit bureaus, in turn, prepare a comprehensive credit report, which contains personal details like name, current and past addresses, work history, social security number, lawsuits, public records, and arrests of the individuals. There are details of financial transactions conducted by the individual during the year. There are other sections in the reports, which contain information about inquiries and collections. Inquiries give details of the people and agencies/companies that had accessed the report of the individual and the reasons for it. Collections contain the outstanding judgments and payments against the individual.

Apart from these, the 3 major credit bureaus provide other services for a fee. The credit reports are free of cost but they do not contain the credit score. The three bureaus prepare their credit scores separately and individuals can purchase them from the websites.

• Experian prepares business credit reports too
• TransUnion was the first bureau to offer online services for accessing credit reports.
• Equifax offers consumers, credit monitoring services and another service known as Credit Lock, which prevents other organizations from viewing the credit report.

Laws Governing the Credit Bureaus

The Fair Credit Report Act, Fair Credit Billing Act and The Fair and Accurate Credit Transactions Act have set some rules and norms, which have to be followed by the credit bureaus. The rules provide that the consumer can access his credit report for free once in a year. Also, no one other than the consumer can access the report without his explicit written permission. Many of these laws are in place to protect consumers from fraud or credit reporting inaccuracies. The 3 major credit bureaus have to adhere to these rules and regulations, and do an excellent job at mitigating the risk to consumers.

Are these the only credit bureaus?

There are numerous other credit bureaus but only the 3 major credit bureaus mentioned above are authorized by the government to provide the credit report to the consumers. This, in essence, makes them the definitive source for credit information and the preferred location for creditors to obtain this information. Many third party vendors have partnered with these credit bureaus to offer value add solutions that attempt to summarize and present this often complex financial information to consumers to make it more digestible.

As a consumer, the ability to get information directly from the 3 major credit bureaus is great. It puts you in a position to see the same information that credit underwriters see when they are making their decisions. There should be no surprises. Especially if you are pulling your credit report once per year as recommended. This will help you ensure that there is no fraud activity or payment history inaccuracies.

This is a great tool that simply wasn’t available a few decades ago. With the explosion of the internet, information has become more transparent, and the 3 major credit bureaus are no exception. Making this type of information as accessible as it is has been a great help with consumers and credit institutions alike. In an instant, a consumer can walk into car dealer, test drive a car, and the dealership can have a credit approval for that individual before they leave the lot. This type of speed in decision-ing is made because of the 3 major credit bureaus ability to provide timely and accurate information, quickly to the correct source.

Your credit ratings are important in today’s world as some much is determined by how well you manage your finances.  Whether you are going to buy a car, buy a house, seek a job, travel visa, seek a loan the outcome will be somehow directly be linked to your credit score and that is why you should order a free credit report.  A free credit report is simply a record of all your past and current credit, and the payment histories associated with them.  The information contained on free credit report will be used in a number of ways that will be discussed further in this article.  Your financial identity is highlighted by the free credit report just the same way passport or social security number shows your identity as a person. There are many good reasons as to why you should order a free credit report the list is endless but this article highlights just a few.

Improving Your Credit Rating

A free credit report offers you the chance to improve your credit ratings, and whether it is bad or good, there is always room for improvement.  Receiving the reports in advance will help you rectify the bad credit history before you approach a bank or any other financial institution for credit.  Bad credit can be eliminated by paying bills on time, settle outstanding debt commitments and remove unnecessary credit lines.  Once you take care of the issues mentioned above your credit rating will improve greatly that when you present your free credit report to lenders, they will not hesitate to give you a loan.

Financial Awareness

Having a free credit report is crucial in ensuring that you are aware of how you are performing financially.  Not having a record of all your financial transactions will likely to cause anxiety that is not good to your overall health.  It is advisable that you know how you spend your finances so that you do not enter into debts without noticing.  With a free credit report you will be aware where you stand financially hence make wise spending decisions that will maintain your good credit ratings.  Having a free credit report leads to one being financial independent.

Asset

A free credit report acts as an asset in disguise that can be used to secure credit from various banks and other lending institutions.  We apply for credit for various reasons such as emergencies, to purchase a car, house, pay school fees.  Hence, you will need to convince the bank or lender that you are going to repay back the loans without difficulties and this is where the free credit report comes in handy.  Your free credit report will show your credit history and how you been repaying your loans and other financial commitments.  For Americans who have been prompt in settling their debts, their free credit report will have good ratings and lenders will certainly give them loans.  A free credit report will help you secure employment in most institutions.  Employers will see you as an efficient financial manager because they expect you will extend this trait when handling company financial resources.

Security Purposes

Ordering free credit report is a sure way of determining that no one has access to your finances apart from you.  It protects you from identity theft so that you do not pay for goods and services that you have not authorized.  If you are not sure about a particular transaction or feel that you are a victim of identity theft, you can order cancellation on all your credit cards.

Clarity of Information

When you order to get free credit report from one of the three major credit bureaus, they will send you your report and this is a good way to confirm that the information shared are true.  It is a great idea to order free credit reports from all three of the credit bureaus (TransUnion, Equifax, Experian), to ensure that all your personal details are correct, and that your balances are the same in all the credit reports.  You should take advantage of receiving free credit report to rectify any misleading information so that you portray your true financial image.

All of our financial dealings are documented and stored for potential creditors to review.  This information is provided to creditors, or anyone authorized to review this information, in the form of a credit report.  According to United States law, every American is entitled to receive one free credit report annually when requested through one of the three major credit bureaus.  Reviewing your free credit report is important in very many ways, for example it can help you in any efforts to reduce your debt.  A free credit report is crucial in ensuring that you don’t become a victim to identity theft, cyber-crime has been on the rise and poses a great threat to identity theft.  Therefore, a free credit report protects you from falling victim to this crime.

Loans

Another reason why it is crucial that you have a free credit report is that it will determine your bargaining power when you apply for various loans from banks and other financial institutions.  A free credit report shows your credit history of how you have been repaying your debts, how many loans have you applied, how many credit cards you have.  Various US Banks and other financial institutions will analyze the information on the free credit report and decide whether you qualify for a loan.  A favorable free credit report will work to your advantage in securing loans at low interest rates, hence without this report it will be impossible for you to convince the bank to give you a loan.

Accuracy of Information

Another importance of having a free credit report is that you will be able to confirm whether your personal data and financial history is correctly printed.  The report contains your names, date of birth, addresses, telephone numbers and this will be the ideal time to confirm if they are in order.  At times credit reference bureaus print wrong information on the free credit report that can portray you differently than you expected.  For example, you may have cleared all your debts but the credit reference bureau has not received this information.  When they print the annual free credit report they will print it according to what is in their records, the impact of this is that you will be seen as a defaulter since your balances show you have debts.

Employability

Free credit reports go long way in determining if you are to be employed or promoted to another post. Employers are very keen in knowing your credit worthiness before they can absorb you in their companies.  Especially for those who wish to work in financial institutions where you will be responsible in handling other people’s finances, a free credit report will show how you manage your own finances and if you have good credit rating chances of landing that job is high.  Employers see this situation as a particular trouble spot should they employ someone with a less than desirable credit history.

Financial Management

Free credit report also disciplines a person’s way of spending and teaches you how to manage your finances.  If the report is obtained annually, it has all the details of your current debt balances; you will be able to know whether or not you have been effective in any debt reduction strategies.  With this information at hand, one will be able to make sound financial decisions and prevent previous sending habits leading to increase debt.  A free credit report acts as a benchmark that you should strive to maintain to attain financial independence. It will enable you to see the areas you need to improve on, non-critical areas of spending that can be avoided such as extra credit cards that add strain to your financial resources.

Cost

Another importance of having a free credit report is it comes at no cost to you.  You do not have pay any fees to credit reference bureaus to get the information.  Under the law, consumers have a right to receive free credit reports upon request.  The free credit report is instant and does not a long time to be delivered to your mail; most credit agencies deliver within 15 working days.  You can also access the free credit report online from various sites if you have any clarification to make regarding your financial status.

Not many Americans take credit reports seriously.  They probably do not know how it can be useful, especially in this era of economic recession.  We will need some sort of credit at a point in our lives unless you are born rich, unfortunately most of us live on credit therefore a free credit report plays a major role in our financial status.   A free credit report is available annually from the major credit agencies when you request for them but statistics indicate that most people are not aware that they are entitled to this information.  One is not required to pay any fee or subscriptions to access the free credit report, under the US government laws everyone can access their credit report upon request.  There are many benefits accrued when having free credit report for example you will be adequately prepared when it comes to securing credit and managing it.

Prevents Financial Problems

Having a free credit report is the first step in avoiding financial difficulties that many people find themselves in.  With a free credit report it will be easier to manage your expenses, as you will be monitoring your debt.

Security Reasons

A free credit report provides the opportunity to monitor any unauthorized activity on your credit and debit cards.  Cyber-crime has become prevalent in this era of information, people end up providing personal details on the internet deliberately or without their consent.  The information will be used by identity thieves to gain access to your financial accounts, make purchases, and launder money without your knowledge.  Therefore, it is advisable to order credit reports to ensure your finances are in order.  A free credit report offers the chance to confirm whether your personal details are correct.  Your date of birth, names, marital status, telephone and addresses are on the report hence this will be the best time to confirm the details and if there are other modifications to be done.

Small Business Growth

Most Americans that own small businesses would like to see it grow in the future.  In addition, most Americans that own small businesses know that their small business is simply an extension of them.  Since their business is either too small or too new to substantiate its own credit, they know they have will be called on to personally guarantee any financing they attempt to obtain.  Monitoring your free credit report can help any business owner ensure that their credit is in adequate enough condition to guarantee any loan growth for the future.  Banks are always willing to do business if the situation is right and the risk is minimal, a free credit report is a tool that you can use to minimize the risk since it shows your ability to repay loans.  Once the bank is satisfied with your credit history, they will probably approve the loan you had applied for at a reasonable and competitive interest rate.   A free credit report can be used as a bargaining tool to get favorable interest rates based on your credit history.

Obtaining Employment

Many human resource departments in the United States are now using credit reports as a basis for approving or denying employment.  An applicant’s ability to manage their finances is being used as an indicator for their management skills, amongst other traits.  Whether or not consumer advocacy groups agree with this tactic, it is a legal and widely used form of employment screening in today’s environment.  This means that now, more than ever, any job seeker should be ordering a copy of their free credit report to ensure accuracy before submitting their first job application.  It is much better to not be surprised when attempting to obtain the job you always wanted.

There are many reasons to review your free credit report, and these are only a few.  There are no reasons not to.  For starters, it is free.  That alone should be reason enough to order your copy of your free credit report and start to put yourself in charge of your finances.  Doing so, will put you in charge of your life, and ensure that you get the financing, and quite possibly the job, that you deserve.

Obtaining a free credit report without a credit card is easier than many think.  There are many sites that are either in existence for the sole purpose of providing free credit report information or they provide it as part of an overall financial package.  The tricky part is that many won’t give you this information without putting in a credit card first.  In addition, credit scores are typically not included in these offers, which are what most consumers are looking for, since the actual credit report may be difficult for the average individual to interpret, as it relates to their credit score.  Either way, there is more information available today than there has ever been.

Before the internet, credit reports were sight unseen for individual consumers.  They existed in the background only as a tool used by lenders and underwriters to ascertain the credit worthiness of applicants.  Today, information has become more transparent, and the credit reports naturally turned into something that consumers wanted to review, understand, and even manage to ensure that their lending requests are approved.

Why review your credit report.  The best way to ensure this is by reviewing your credit report.  However, this can seem costly as many of the service providers offer a monthly charge of around $20 for this service.  This can add up over time, and probably does not give an individual a good value proposition and will eventually be looked at as an unnecessary cost.  There are benefits to obtaining your credit report though.  For starters, it will assist you in identifying any fraud activity quickly to mitigate the damage.  It also allows you to notice inaccuracies in a timely manner, which will greatly increase the likelihood of getting it fixed and corrected easier through the creditor.

Another benefit it that it will allow you to stay on top of your financial situation and view yourself as an underwriter or lender does.  This is invaluable in helping to make short and long term credit decisions like whether or not you should take on more debt, pay down some debt, or consolidate your debt. These types of decisions can have a rather large impact on your credit score as well, especially if you have even a basic understanding of how it is calculated.

Where to go.  Okay, so we have determined that it is a good idea to review your credit history, and that we are fortunate to live in a time when that is possible.  Now what?  Where can you go to get this information?  First and foremost, if you have never requested a copy of your credit report, and you wish to obtain a free credit report without a credit card being used, then your first stop should be one of the three major credit bureaus.  By law, they are obligated to provide you with a free copy of your credit report once per year upon your request, as illustrated here at www.freecreditreportsinstantly.org.

In addition, the three credit bureaus, TransUnion, Equifax, and Experian must also provide you with a free credit report in the event that you were turned down for credit recently based on information provided on your credit report.

There are many places on the internet offering free credit reports, but unfortunately, in my research I have found that most don’t offer a free credit report without a credit card.  Instead, they offer a free subscription for a short period of time if you provide your credit card (which they claim is for verification purposes).  After your introductory period, they begin to charge you monthly for their services.  There are a few websites that don’t attempt these types of tactics.  The first is a www.quizzle.com which offers their customers a complete view of their finances, including a free Experian credit report, with an internally calculated (non-official) credit score.  This score is a good enough gauge for someone to determine their credit worthiness.

Another site that offers a free credit report without a credit score is www.creditkarma.com.  The attractive thing about this is that they offer both a free credit report and a free credit score.  You must be ready to endure a lot of ads however, as this ensures that the site remains free.

There are many factors that go into your credit score, but the main that factor that a credit bureau will use to determine your score is your repayment history.  Other factors, such as the amount and type of debt outstanding for example, will play into the credit score, but no other factor will have as much of an impact as simply paying your bills on time, as illustrated at here at www.freecreditreportsinstantly.org.

The credit score range.  Before going into a full explanation about the credit score range, it is important to note that the a credit score is simply a number at a particular point in time, that reflects the best information that a credit bureau has on your credit report about your credit history.  This means that a credit score is a living number, and can change month to month based on your activity.  While your credit score can change all the time, it typically takes a lot of time to improve your credit score, unless there were obvious inaccuracies that were taken out of your history.  Late payments, however, can damage your credit score almost immediately.  When it comes to credit cards, the road down is faster than the road up.

So, now that we know that a credit score is always changing, how do we interpret the score?  Well, that’s easy.  Over time, ranges have evolved within the credit score range.  Falling into these buckets will give a lender a basic idea as to your overall credit worthiness.  These ranges are as follows:

• 700 – 850 – Excellent
• 680 – 699 – Good
• 620 – 679 – Average
• 580 – 619 – Low
• 500 – 579 – Poor
• 300 – 499 – Bad

As mentioned earlier, the credit score isn’t the only factor, and a lower credit score doesn’t automatically disqualify you for your credit request, but it will make it more difficult.

How is it calculated?  Without a P.H.D. in mathematics and working knowledge of the FICO scoring system, you probably won’t be able to determine exactly how the credit score is calculated.  Fortunately, you don’t need to know exactly.

As mentioned earlier, your credit score takes into consideration all aspects of your credit history.  It factors in your payment history, length of credit history, amount of debt, amount of open credit accounts, percentage of debt used to open lines of credit, number of inquiries, types of credit accounts, and the types of credit you are applying for.  This information allows a credit bureau to determine a credit score for you.  It is a good idea to annually check your scores with all three credit bureaus, since they all calculate your credit score slightly different, although they all use the same credit score range.

Credit Score Myths.  The most common misconception or myth is one that we already covered.  Many people believe that a score doesn’t change often.  This could not be farther for the truth.  In fact, many debt counselors can assist you in understanding how to optimize your score.  Keep in mind, there is no way for anyone to clean up past delinquencies.  Anyone promising to do so is most likely attempting to commit fraud.  However, there are legitimate businesses who can help you either remove inaccuracies or advise you on making small changes that will have a big impact on your credit score, since they understand how the scoring system works.

There is a lot that goes into a credit score, but just keep in mind that paying your bills on time, not taking on too much debt, and not maxing out your credit lines are the best ways to a higher score, ensuring that you stay on the top end of the credit score range.

It is much easier to open an unlocked door than to break a window. It today’s world, for many consumers it is easier for them to leave doors unlocked. What does that mean exactly? Well, consider how many usernames and passwords you have for various websites and accounts. In an attempt to reduce liability on their end, and increase security measures, many financial institution websites have created elaborate password rules that make passwords so complex that even Stephen Hawkins might forget it.

This has gotten confusing for people, and the trend is now for people to create easier passwords, or to enlist the assistance of a password keeper application on their personal computers or mobile devices. The passwords used to access these applications are typically not very strong. Identity thieves have targeted these applications in an attempt to obtain a treasure chest of passwords.

Is that the only way they get information? Unfortunately, there are a number of more sophisticated ways that identity theft can occur against you. Fake sites can be made to mimic real looking sites, which will then capture the entered information. Fake emails will be sent from reputable looking email addresses asking for verification of personal information, just to name a few. There is much more information available at www.freecreditreportsinstantly.org/identity-theft/.

Once this information is obtained, then fraudsters will usually try some activities to gauge an individual’s responsiveness. In other words, if they can do something small that doesn’t garner the attention of the victim, then they will larger activities later since the risk of getting caught seems lower. That is where credit monitoring services can come in handy.

What a credit monitoring service can do. Staying vigilant and monitoring your credit is not an easy task, and can get expensive if you were attempting to it yourself. That is why there are a handful of companies out there that have developed relationships with credit bureaus directly to identify fraud attempts. On your behalf, they will work with a credit bureau to review your credit report for any unusual activity, and notify you immediately whenever something looks amiss. The faster these attempts are found, the more likely any identity thief will simply move on to another victim, or a softer target.
Granted, there may be a number of false positives when engaging this type of service. For example, applying for a few loans at the same time, like you would if you were car or home shopping, may trigger an alert; however, these activities are explainable, and the small nuisance is worth the overall protection.

How much a credit monitoring service costs? Cost is typically the most prohibited factor to someone making the decision to purchase credit monitoring services. The monthly charge can run around $15-$20. For many, this seems like an unnecessary cost. There are many objections that people have when attempting to justify this type of cost. The first objection is denial. Many don’t believe that fraud will ever happen to them, and therefore not worth the expense. This is false. If you have credit, you can become a victim. On the other end of the spectrum, some people believe that if fraud was going to happen to them, than it is inevitable and credit monitoring service isn’t going to stop it. Well, this is 100% true; but the goal isn’t to stop it. To goal is to catch it sooner than later, and mitigate the risk. In that respect, credit monitoring services can be a great tool.

Before lenders can give you any money, they like to know if you are risk free. They would always like to know if you are able to repay the money they lend you. Credit scores help them to determine that. The higher the credit score, the less the risk you will be. Increase to your credit score take place over a period of time and require a lot of personal effort. The only quick way to fixing a low credit score is to pay down any debt you may be having. There are people who have a poor score because of negative dispute information on a credit report. This can be negotiated with a creditor for them to withdraw it.

The determining factors to a good credit score include:

1.Your payment history

2.The amounts you owe

3 Length of your credit history

4.Types of credit used

5.Your new credit

The ways that you can help improve your credit history based on these factors above are:

1.Improving your payment history

• Always pay your bills on time. Late payments play a big role in reducing your credit score
• If you have bills that are the past-due date, pay them and ensure you are on current basis with all your bills
• If you realize that you will have a problem paying your bills on time, contact your creditors in advance. Try to work out a payment arrangement and negotiate with them in such a way that you keep at least a portion of the late payments off your credit report
• If you are really in a big financial fix, try and consult with a legitimate non-profit credit counselor. Avoid the people who promise you quick reversals to you credit problems

2.Keep your debts to a minimum

• Keep your credit card balances as low as you can. High debt-to-credit-radios drive down your credit score
• Do not close any unused accounts because a zero balance can help lift your low credit score
• Do not open accounts that you do not need as a way of altering your debt-to-credit-ratios. This can lower your score
• Pay off debt and do not move it around. Owing the same amount but having fewer open accounts can lower the credit score if you max-out on the accounts involved

3.Length of the credit history

• The only way to improve your credit score is by managing time wisely
• Do not open many new accounts in a short period of time especially if your credit history is less than three years. If you add accounts rapidly, they send a red flag that you are not be able to handle your credit well

4.Manage new credit wisely

• Several credit inquiries within a short time show that you are trying to open multiple accounts and this lowers the credit score
• Checking your own credit report does not affect your scores
• If you have had credit problems in the past, try and open a few new accounts. Pay them on time and do not max out the credit limits
• The software used for credit scoring is able to detect when you are shopping for a single loan within a short period of time. If you have multiple enquiries, pull them an close as possible

5.Types of credit you use

• If you have a mixture of credit cards and installment loans with fixed payments, they can help you raise your score if you manage the cards responsibly
• Do not open new accounts in an attempt to mix up your credits
• Closing an account does not remove it from the credit report since it is still considered for scoring purposes
• Having many installment loans can lower your scores since payments remain the same until the balances are paid in full

Every once in a while you may find errors on your credit report. The most common is when you have accounts listed in your report that belong to someone else who shares the same name with you. You may also find information some transactions that are not yours. Under some acceptable circumstance in, the Fair Credit Reporting Act (FCRA), you have the rights and the Credit Reporting Agency (CRA) has the responsibility of correcting any errors and completing any information that may have been left incomplete or inaccurate in your credit report.

When you find such errors, you should not use those companies that say they can fix your credit history, erase bankruptcies, liens or bad credit. There are a few that are legitimate but you would not like to take chances.

The flow of error correction should be:

1.Document everything – This includes the dates and time of phone calls made, the names of the people you have spoken to, what they said and what your action was. You should also keep a copy of everything you send them. At no one time should you send them original copies but you should keep them with you and send them copies. The process of correcting errors can take a while and in some cases up to six months and you may have to be aggressive and persistent.

2.Let the paper work begin – You may be required to write many letters explaining the inaccuracies. You should send the first letter to the Credit Reporting Agency (CRA) giving your side of the story. You should include all your details and also what the inaccuracy is. Give them the facts and request a correction. When sending the first letter, you should include a copy of the credit report with the incorrect information circled or highlighted along with copies of any documentation that would support your claim. You should send the letter by certified mail with a return receipt for you to know it has been received. Keep a record of everything that you send. The second letter should be sent to the creditor who supplied the incorrect information informing them that you are disputing it. Send copies of the supporting documents as well.

3. Give them 30 days – The Credit Reporting Agency (CRA) legally has 30 days to investigate the claim unless it is viewed as frivolous or irrelevant. If you have not heard from them after this time, you should contact their customer service department. They have a toll-free number on credit report that you can call for assistance. You should remember to keep note of all the conversations and any actions that were taken as a result.

4.  Re-reviewing credit report – When you get a written report from the credit agency, you should also get a new copy of the credit report if there were any changes made to it.  If any information is changed on the report, the Credit Reporting Agency (CRA) cannot change it back unless the creditor provides proof that it was accurate. When this happens, the Credit Reporting Agency (CRA) should send you a notification that the item has been put back on the report. You should also follow up the same with the creditor or merchant that was involved. It is good to also hear their side of the story

If you dispute something and get to realize that they were right and you were wrong, you should try going back to the creditor to persuade them to take it off your credit report. A creditor can remove anything they have reported if they want to. It is good to give it a shot though because any negative information can affect your credit report for seven years.