Credit Bureaus - What You Need To Know!

A credit bureau, or credit repository, is an entity that gathers information about consumers' credit histories. Your credit history/report includes information regarding the following items:

? Identity information such as your name, address, social security number, spouse and date of birth.

? Payment habits such as how promptly you have made payments to previous creditors.

? Public records such as records of arrests, indictments, convictions, lawsuits, tax liens, marriage, bankruptcies, and court judgments.

? Debts.

? Other relevant credit data Information concerning your current employment such as the position you hold, length of your employment, and possibly your income.

? Information about your personal history such as the number of dependents you have, your previous addresses and information about your previous employment.

Credit bureaus sell credit reports to credit grantors, such as banks, finance companies, and retailers. Credit grantors use credit reports to determine whether or not a potential borrower is creditworthy.

There are three major credit bureaus in the United States:

Equifax: 800-685-1111 website: www.equifax.com

Experian: 888-397-3742 website www.experian.com

Trans Union: 800-916-8800 website: www.transunion.com

These three bureaus provide nationwide coverage of consumer credit information. The credit bureaus are a for-profit system that generates billions of dollars in revenue each year from selling copies of credit reports to creditors and mailing lists. Trans Union made 1.5 BILLION dollars last year.

It is essential to understand that Credit Bureaus are nothing more than record keepers. Simply put, they keep a record of who has given you credit, when they gave you credit, how much credit you are given and whether or not you paid it back on time. When you want to obtain credit cards, loans, financing for a car or home, leases, apartments and sometimes even employment, the lender or bank will check your credit to see your financial history.

Credit Bureaus are paid by the people who request your credit file. Credit Bureaus are not run by banks, police, or government and they have no legal power over you. So don't be intimidated by them.

They are the Credit Bureaus because they own large computer systems capable of storing credit information on everyone in the United States. However, because of the tremendous amounts of information on their computers, their method of storing information is very basic and contains numerous errors.

Since the bureaus have made so many errors in the past, all Federal Laws regarding credit information is very much in your favor.

How do the credit bureaus obtain information?

Credit bureaus obtain identification and credit information from credit grantors, such as banks, retailers, and collection agencies. Bureaus obtain monetary-related public record information directly from the court systems.

How long do the credit bureaus keep my credit information?

The credit bureaus keep your personal credit history for a period of approximately ten years.

- Closed or Inactive Accounts - 10 years from the date of last activity.

- Derogatory Accounts - 7 years from the date of original delinquency.

- Public Records - 7 years from the date of payment or indefinitely if the Public Record is an unpaid tax lien.

- Chapter 7 Bankruptcies - 10 years from date filed.

There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you've applied for more than $150,000 worth of credit or life insurance.

What are the laws governing credit bureaus?

Congress passed the Fair Credit Reporting Act (FCRA) in 1972 to curb the abuses of the credit reporting bureaus. The FCRA is the governing federal law on the issue of credit reporting. The Fair Credit Reporting Act helps consumers promote and use their right to make changes to credit reports. It is a requirement, under section 1681e, that:

(b) Whenever a consumer reporting agency prepares a consumer report, it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. Further, the FCRA provides a procedure in case of disputed accuracy, under section 1681 i whereby a consumer can demand that an investigation be made into the completeness or accuracy of any information in a credit report. If the status of the information cannot be determined, the data must be removed or corrected. The FCRA states:

(a) If the completeness or accuracy of any item of information contained in his file is disputed by a consumer, and such dispute is directly conveyed to the consumer reporting agency by the consumer, the consumer reporting agency shall within a reasonable period of time reinvestigate and record the current status of that information unless it has reasonable grounds to believe that the dispute by the consumer is frivolous or irrelevant. If after such reinvestigation such information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall promptly delete such information. The presence of contradictory information in the consumer's file does not in and of itself constitute reasonable grounds for believing the dispute is frivolous or irrelevant.

How do errors occur and how frequently?

Depending on the source of your statistics, estimates of credit bureaus errors run as high 90%. The Attorney General of New York State has estimated that credit bureau errors are in at least one-third of all reports, the United States Congress has estimated that errors exist in at least one half of all reports, a Consumers Union study found errors in 40% of credit files and the Charles Givens Organization conducted a study in which 90% of the credit reports reviewed contained errors.

You have the right under the FCRA to remedy all file information that is irrelevant, not properly utilized, inaccurate, incomplete, misleading or does not reflect your creditworthiness, credit standing or credit capacity.

REMEMBER: THE PRACTICE OF CHALLENGING CREDIT DATA AND SECURING CREDITOR-BASED TRADE LINE DELETIONS ARE WHOLLY WITHIN THE PURVIEW OF THE LAW AND ARE THE RIGHTS OF ALL CONSUMERS.

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Creditology Declare War on Your Credit Score

Creditology as we may refer to it, is the mathematical equations and algorithms used to produce a score from a compilation of massive amounts of data that is meant to envision the disposition for a borrower to default on a loan. This debatable and regularly capricious rating system has kept many Yanks in a state of helplessness, and allowed banks and insurance companies to charge higher charges and rates based on a number that often times makes almost no sense, and is really incorrect. A very valuable industry has arisen, that is empowering the consumer to have control over this number, it is called creditology credit repair. Quality credit industry pros have access to software that runs mathematical equations similar to the credit firms equations, except in reverse, to pinpoint the optimum levels of credit limits against balances, kinds of accounts to maintain as open, period of time to keep accounts open, etc . What is a Credit Score? A credit score is a number generated by a mathematical formula that is supposed to envision credit suitability. The commonest of the credit score standards is the FICO score by Fair Isaac. Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is awfully secretive of the exact formula. Here is a % breakdown of a FICO score : Thirty percent - Debt ratio 15% - Length of credit history ten percent - sorts of Credit It is really feasible to remove negative items from your payment history thru a credit restoration service, or even on your own, with the right guidance. Consumers can increase their credit history with positive rated accounts that will improve score. With a good credit restoration company, it can be determined the exact number of new accounts to open, with the exact credit limits and balances to maintain to optimize the score. Most people are aware of the 3 free credit score reporting agencies TransUnion, Equifax and Experian. The average difference in score between the highest and lowest of your three FICO scores is sixty points. According to the Government Accountability Office, 80-90% of credit reports have serious mistakes on them, and this does not even include the more minute mistakes a quality credit restoration company looks for. How am I able to get a free copy of my credit report? However, this is just a record of accounts on the credit score and a general reference to standing, ie "good standing". Specifics are not offered such as behind dates, and most significantly the particular score. For this info, the buyer must pay the companies approximately a $40 fee. The law that was meant to help customers monitor their credit has become nothing less than a bait and switch to lure clients to get their "Free Credit Report", only to realize the crucial info is not free! The bottom line is that there are very different variants of credit profile enhancement, including removing reporting of negative accounts, where possible, removal of erroneous reporting, and frivolous reporting by creditors, as well as the mathematical dynamics behind creditology and free credit score online repair. The client must utilize a company that has all of the resources important to optimize every aspect of the credit profile, not just mail out dispute letters.

Best Credit Repair Methods

Bad credit can definitely be a result of irresponsible money management. Many times, however, it occurs as a result of monetary hardship. It may happen that one-day you are all current with your bills and the next day you lose your job or become unable to work. If something like this happens and you fall behind on your bills, your credit rating will no doubt suffer.

All the best credit repair agencies claim to be able to remove bad entries from you report. Many are successful but it is possible to have them removed yourself if you are willing to do the work. There are two main methods by which you may be able to remove harmful entries from your report.

Method #1: Fix Credit Score by Filing a Dispute with the Credit Bureaus

Once a dispute is filled, credit bureaus are required by The Fair Credit Reporting Act to investigate any item that you dispute. If the item in dispute is found to be inaccurate, unverifiable or false, it must be removed or corrected. They have thirty days to complete their investigation.

If you feel that any information on your report is inaccurate, you should definitely file a dispute. However, many people have had luck getting items removed that were in fact accurate, including collections accounts and repossessions. If a disputed item is not verified within the creditors time limit (usually 30 days) then it must be removed.

To dispute an item on your report, you need to write a letter to each of the bureau's stating that you dispute the entry. You do not need to explain why you are disputing an item. Of course, if the entry is verified, it will remain on your report. If the creditor verifies the information later than the 30-day time limit, the credit bureau could reinstate the item as long as they notify you at least five days prior to doing so.

This is basically what the best credit repair companies will do to help with credit reports. Depending on the number of items you wish to dispute, this process may require a ton of your time and a lot of effort. This is one reason people decide to pay these agencies. Another reason is that they simple don't know that it's possible to do it themselves.

Method #2: Fix Credit Report by Speaking directly with the Creditors

Sometimes it is very intimidating when dealing with creditors. Speaking to them directly can help in getting negative items removed from your report.

If you only have one or two late payments on you account, a creditor may be willing to erase the negative information after you begin a regular payment schedule. If you have repossession or a collections account on your report, payment in full may convince them to remove the entry. As they say, you will never know if you don't ask. Requests to remove late payment information can be made as soon as you bring your balance current. But if you're hopeful for a removal of a repossession or collection charge, it's better to negotiate a deal in advance, before you pay anything.

If Bad Entries are not Removed

There is no assurance that disputing information on your credit report or negotiating with creditors will get harmful items erased from your record. If it does not, the best thing to do is try to build up some positive information on your report.

The first thing you need to do when trying to rebuild worthy credit is bring previous due accounts current. Attempt to work out a deal with your to accomplish this, or talk to a credit repair agency. Don't miss payments on active accounts to put money toward those that are past due. Always keep the current account current.



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Understanding Credit Scores and Repairs

If you are applying for a mortgage, you're going to have to deal with credit scores. Here's a primer on credit scores and methods for improving them.

Credit Report

Step one in the process is making sure that you have a current copy of your credit report. Congress recently amended the Fair Credit Reporting Act so that consumers may now receive one free credit report annually. There are three major credit bureaus: Equifax, Experian, and Transunion. Since entries can vary across bureaus, you'll want to request a free report from each of the three companies. (Go to www.annualcreditreport.com)

Credit Score

It's also imperative to know just what a good credit score is. Most A-Paper scores typically begin around 680, although this number may differ slightly among lenders. Don't despair if you come up shy, there is always room for improvement. Increasing your score just 5 points can save a significant amount of money. For example, if your score is 698 and you increase it to 703, then you could save yourself thousands of dollars over time as a result of a slight improvement to your loan's interest rate.

While credit repair is necessary for some, it is not the panacea to increase your credit score. Even if you have stellar credit, you can enhance your score through these steps:

1. Evenly distribute your credit card debt to change the ratio of debt to available credit. Let's say you have a credit score of 665. If you have debt on only one card, and four additional credit cards with zero balances, evenly distributing the debt of the first card could move you closer, and possibly into, that ideal bracket.

2. Keep your existing accounts open and active. The average consumer is usually anxious to close credit card accounts that have zero balances, but doing this can cause them to lose the benefits of a long-term credit history and increase their ratio of debt-to-available credit. The bottom line is don't close those old accounts!

3. Keep credit inquiries to a minimum. Each inquiry into your credit history can influence your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you're only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.

Remember, credit scores do not instantly get better. Improving them requires time and diligent effort on your part, so it's a good idea to start at least three to six months prior to submitting your application for home financing.

If credit repair is what you need, you can either begin the process yourself or seek out a repair service. If you decide to make your own improvements, visit as many websites as possible to get information regarding credit laws and consumer rights. Diligently search through them and educate yourself to ensure that you don't sustain any self-inflicted wounds. A good place to start would be the Federal Trade Commission's website, which contains a plethora of helpful literature.

If you're facing severe or complicated credit issues, then you'll probably want to enlist the assistance of a professional credit repair company. Before you do, be sure to familiarize yourself with the FTC's regulations on credit repair. With over 1100 credit repair companies to choose from, it's important to be certain you are dealing with a reputable firm. Examine the FTC's information on fraudulent practices to avoid falling victim to credit repair scams.

Albeit, addressing credit issues can be uncomfortable. By taking these steps now, however, you'll be that much closer to obtaining the home of your dreams.

Dan Lewis is a mortgage broker with http://www.gwhomeloans.com - San Diego mortgage brokers providing home loans and refinances.

Real And Fake Credit Repair Companies

Legitimate credit repair companies must abide by the United States Credit Repair Organizations Act, or CROA for short. This is a set of laws that was set up by Congress back in the 1990s to protect consumers from the many predatory practices then prevalent in the industry. Good credit repair companies will abide by CROA, and one way to tell whether they do so is if they even bother informing you about CROA in the first place, for by law all such businesses must tell their clients about CROA and their rights under CROA.

Bad credit repair companies will likely not mention anything at all, or leave out important details, such as the fact that you do not have to pay for anything upfront, and indeed never have to unless a task has been completed in full. Another important consumer right that such credit repair companies will leave out is the one that allows you to pursue your own efforts at credit repair, at the same time as and even independent of the agency's own endeavors. Moreover, CROA allows consumers to change their minds, even after signing a contract, within three days. And one more thing - CROA cannot be waived, which means that the consumer has rights even if he or she purportedly signed them away!

CROA protects consumers from bad credit repair companies, but also stipulates responsibilities on the consumer's part: Basically, you may not lie about your credit history or try to create a new identity in order to escape from it. Thanks to CROA, however, consumers have a basic level of protection when it comes to trying to fix their credit scores, which are more important than ever these days. In large part on account of the economic tumult, credit reporting agencies have raised the bar and thus what was once a good if middling score is today mediocre at best. This makes having a good rating more important than ever - and credit repair services more necessary than before.

Indeed, not only home and auto loans are dependent on a good credit score, but more and more employers are making a credit check a part of their overall applicant vetting process. Alarm bells are being raised at using credit scores this way, but until something concrete happens legislatively - which is highly unlikely - anyone wishing to enjoy the financial conveniences of a modern society needs to maintain a good rating.

Keep in mind that this history is like a baby or a new business. In the beginning it may seem as if there really is no problem plus we are only human and make mistakes here and there only to find out later on it was a big mistake, but that does not mean the world is going to end, there are many alternatives to fixing up the history to completely eliminate debt consequences. Think of it as burning fat since liposuction will help you escape but good exercising kills it all, with that in mind the sooner you manage the sooner life will be much better, or less harder.


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Article by Paul Wise. When it comes to credit repair companies Paul suggests iCreditinc.com for advice on credit repair and debt consolidation.

Does Credit Repair Really Work?

As a well known credit guru people regularly ask me if credit repair really works. Credit repair can be very effective if performed the right way.

The real issue is that many "credit repair" companies collect money from consumers for credit repair services. But the services they perform are nothing more than mailing the credit bureaus simple dispute letters.

For example, it might be disputed that the item really doesn't belong to the consumer or that the consumer never really went late on the derogatory item.

The hope is that the creditor will not respond to the dispute and the items will be removed off the credit report as a result. These types of credit disputes depend on creditor ignorance or human error to be effective.

But over the last few years the credit bureaus have wised up to these credit repair methods. To counter, the credit bureaus now use sophisticated computer systems named E-Oscar and OCR.

These computers sniff out letters which appear to come from credit companies and then automatically respond to those disputes calling them frivolous. The credit bureaus' E-Oscar computer then electronically processes the dispute nearly eliminating human error.

These credit bureau computers now render these types of disputes minimally effective. Some items will get deleted to simply be placed back on the report a short time later, and typically the only accounts that will be permanently removed are older accounts creditors no longer care about.

BUT, all hope is not lost…

TRUE credit repair is actually very effective, but it also is time consuming. Accounts have to be disputed to the credit bureaus in a mythological manner and the most effective disputes are done direct with the creditor themselves.

There are hundreds of consumer protection laws such as FACTA, The Fair Debt Collection Practices Act, HIPPA, The Fair Credit Billing Act, and many more.

Many creditors blatantly ignore and violate these laws with the hopes
that you will not have the knowledge or time to be able to challenge them.

And they are right; you would have to spend endless time learning all of the hundreds of consumer protection laws to know enough to challenge your creditors successfully on your own.

But, using these law violations as leverage to force the creditor to delete the negative items is a VERY effective tactic to use to repair your credit. Credit companies who use this tactic and participate in direct creditor disputing typically see deletion rates of 70% or higher.

The drawback is in order to effectively dispute and delete your negative accounts, you will spend countless hours learning how to dispute and delete your negative credit items.

Or you can find a highly recommended professional company to do it for you instead. But make sure you find a reputable company.

There are only a few 100% legal credit companies in the U.S. One of the most well known companies who produce the strongest and fastest results is Elite Credit Inc out of the Tampa Florida area (www.perfectcreditfast.com.)

I have personally seen their dispute methods and results, and even I am impressed. You won't find faster or stronger results at such a low price anywhere else that I have seen.

Or you can visit online credit forums and start learning how to go at it alone. Whatever you decide to do, DON'T decide to do NOTHING at all.

Bad credit is estimated to cost an individual consumer over $1,000,000 in a 30 year time period.

Strong dispute methods should remove over 70% of your negative items, and this could be the difference between you just struggling living paycheck to paycheck or living the life of your dreams.

Get started now with fixing your own credit, or hire a professional to do it for you. Whichever you chose, stop delaying and get started today on rebuilding your credit profile and your financial security.


ABOUT THE AUTHOR

Blake Kinsing has spent over 13 years in the finance and credit arenas. He has been solely responsible for lending millions of dollars to consumers in need.

Blake has also spent much of his career helping his clients overcome finance and credit issues. He has been operating his own Credit
Forum for 7 years teaching others how to repair their own credit.

Blake has spoken in front of groups of realtors and mortgage professionals about credit and credit repair.

Blake prides himself as being a true advocate for consumer credit rights. He is viewed as one of the top credit authorities in the country, with thousands who loyally follow his advice and receive his popular credit newsletter.

You can visit Blake's credit log for more information on improving your own credit or finding a reputable company to assist you.