What do credit bureaus do?
Credit bureaus have huge databases on the credit histories of consumers. This information is gathered and given to the credit bureaus from creditors that have extended you credit in the past (for example, landlords, credit card companies, the IRS, department stores and banks). Your credit history contains information that creditors use to evaluate and determine your ability and willingness to repay credit. Typically, credit bureaus give the following information: Your open accounts, credit limits, current balances, number of late payments, collection actions, tax liens, and whether you own your own home or not.
What's the worst thing that can appear on my credit report?
There are basically ten things that look the worst on your credit report. Here they are, listed from the best to the worst: Credit inquiries, credit rejections, late payments, past due and unpaid payments, court judgments, collections, loan defaults, repossession, foreclosure, and bankruptcy.
How long does information stay on my credit report?
All negative information stays on your credit file for anywhere from 3 to 7 years. However, if you are applying for life insurance for over $50,000, or for a job that pays over $20,000, a credit bureau may provide information that is over 10 years old.
I have bad credit now. Do I have to wait 7 to 10 years before I can get a loan?
On the practical level you can have an A-rated credit report within 2 years of even bankruptcy. Why? Because lenders are much more interested in your present circumstances than what happened to you 3 to 10 years ago. Rebuilding your credit can be done rather quickly through a systematic plan, and a little perseverance. Keep in mind that positive credit information stays on your credit report forever.
I got my credit report. What do I do now?
Go through it and look for negative items, such as: Past due history, collections and profit and loss, inquiries, and public records (bankruptcies, liens, court judgments). If any of these are inaccurate, dispute them directly with the credit bureau.
I found errors on my credit report. What do I do now?
The Fair Credit Reporting Act states that all erroneous or unfair credit information has to be eliminated from your file. All consumers have the right to challenge the accuracy of their credit report. Once you challenge the accuracy of a particular item, the credit bureau must investigate that item within 30 days. If the credit bureau finds the item erroneous, or cannot confirm or deny it, it must be removed immediately from your credit file.
What if I found more than one error?
You should challenge each error separately, in writing only. Don't pick up the phone and call the credit bureau. Wait until one item is resolved before challenging another. If you challenge a whole bunch of items, the credit bureau will send you a letter saying that your disputes are irrelevant or frivolous, and they will do nothing further. You have to patient when dealing with the credit bureaus. Deal with each item one at a time.
How do I correct negative information on my credit report?
Challenging the accuracy or completeness of an item is the best way to have a negative item removed. It is best if you can include documentation that supports your challenge. If negative information is outdated, you again need to bring this to the attention of the credit bureau in writing. If the credit bureau fails to verify the items you challenged within a reasonable time (defined as 30 business days) from the date your challenge was received, the Fair Credit Reporting Act gives you the right to have the challenged item removed from your report.
Sign up for a free consultation! | More tips
