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Consumer
Publications List
Is
Your Credit Report Accurate?
A Suitland woman
was unable to refinance her car loan. She discovered that her credit report
listed accounts she had paid off as having been "charged off" by the businesses,
and other accounts were incorrectly listed as being in collection.
When
his application for a credit card was denied, an Olney man was surprised
to find out that his credit report showed delinquent accounts for stores
he had never visited, including a debt of more than $1,500 at a jewelry
store. His credit was being used by an identity thief.
An Annapolis
man was refused an extension of credit from his credit union. Upon getting
a copy of his credit report, he saw debts that belonged to his father.
Inaccurate
information often appears in consumers' credit reports. In July 2000,
Consumer Reports magazine reported that half of the credit reports they
surveyed had serious errors in them. These errors could result in your
being denied a credit card, an insurance policy, a job or a mortgage.
If you aren't aware of the errors until you apply for the new credit,
loan or job, you may not be able to get the report corrected in time.
That's why consumers should check their credit reports from time to time,
and especially before applying for a major loan or a mortgage. By law,
Maryland residents are entitled to one free copy of their credit reports
from each reporting agency each year. (See contact information at end.)
You are also
entitled to a free copy of your report if you have been denied credit
and the company you applied to tells you it was because of something in
your credit report, or if you are unemployed, are on welfare, or have
been a victim of fraud.
What's
in a Credit Report?
Your credit report contains information about how you have handled credit,
such as loans or credit card accounts, as well any bankruptcies, tax liens
or monetary judgments issued against you. It is compiled by a credit reporting
agency, often called a credit bureau. These agencies get the information
from creditors, such as credit card issuers and retailers, who regularly
send information showing what each of their account-holders owes and whether
the payments were made on time. They also get information from public
records. The agencies sell the report to credit grantors, employers, landlords
and others who want to check out an individual's credit history.
Correcting
Errors
When you request a copy of your report, the credit reporting agency must
send you an exact copy of your report along with a written explanation
of any codes used. They will include a list of who else has made inquiries
so you know who has the information
If you find
incorrect information in your credit report, the Fair Credit Reporting
Act provides a process to get the information removed:
- Write
to the credit reporting agency, telling it which items in the report
are incorrect and why. Include copies of relevant documents. Keep a
copy of the letter for your records.
- The agency
must, within 30 days, reinvestigate with the company that reported the
information.
- If the
credit reporting agency cannot verify the accuracy of the information,
it must delete the information within seven days and mail a written
correction to you and each person who received a copy of the report
with the incorrect information.
- If the
credit reporting agency verifies the item was accurate, it must mail
you a written notice of its findings. If you disagree with these findings,
you may file a brief statement explaining why, which becomes part of
your credit report. Following a dispute, Marylanders can ask the credit
reporting agency to disclose the name, address and telephone number
of each person contacted during the reinvestigation. That way, you don't
have to spend hours tracking down who at "the bank" verified adverse
information with the credit reporting agency.
If you are
unable to resolve the problem, call the State of Maryland Division of
Financial Regulation at 410-330-6830.
Adding
Information
Your credit report will not include information on every debt you have
ever owed. Some creditors do not regularly report consumer account information
to credit reporting agencies, but only do so when an account is in collection
or in default. Typically, bank cards and large retailers regularly report,
while smaller retailers, auto dealers and mortgage companies may not,
unless the account is delinquent or has gone to collection. If you're
denied credit because of "no credit file" or "insufficient credit file,"
and your credit report is missing information on credit accounts you have,
you can ask the credit reporting agency to add the information. They are
not required to do so, but may for a fee.
Improving
Your Credit Record
So-called credit repair companies say they can "clean up" bad credit reports,
in return for a fee. But the truth is, the only thing these companies
can legally do is what you could do yourself - dispute any wrong information
in it. Nobody can remove negative information that is accurate from your
credit report. The only thing that can really improve your credit report
is time and being diligent about paying off debt. Generally, negative
information about you is removed from your report after seven years, although
a bankruptcy can stay in the report for 10 years.
To
Get Your Free Report
To request your free annual copy of your credit report, call the three
major credit reporting agencies, all toll-free:
Equifax:
1-800-685-1111
Experian: 1-888-397-3742
Trans Union: 1-800-888-4213.
Reduce
Your Junk Mail
Credit reporting agencies provide the names and addresses of people in
their files to companies that market credit cards. As a result, you may
receive a lot of pre-approved credit card offers in the mail. These can
not only add to your unwanted "junk mail," but can also lead to credit
card fraud if they fall into the hands of a mailbox thief. You can tell
all three major credit reporting agencies that you want to opt out of
receiving these offers by calling 1-888-5-OPT-OUT.
October
2000
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