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How Healthy Is Your Credit
here's only one way to serious as a creditor reporting
discover the "health"of that you were late with a payment
your credit. You need to when in fact you were not late at
examine your credit report. Your all.
credit report is your "consumer
identity" that potential lenders This error might not seem like a
will use to judge your credit big deal to you. However,to a
worthiness. future lender like a mortgage
company it makes a big
Use these tips to give your difference!
credit profile the "tune-up" it
needs: Carefully examine your credit
report and if you find an error
Tip #1- Check for Errors contact your creditor and the
credit bureaus. Catch and
Your credit report or profile is correct these errors now before
more than just a collection of it hurts your chances of securing
who your creditors are and how credit in the future.
much you owe them or have paid
them. Tip #2 - Correcting Errors
The first thing you need to do is The two most common errors
carefully check that your credit contained in credit reports are:
report is accurate. Nearly 70%
of credit reports contain errors. 1) wrong account information
2) incorrect recording of late
payments.
These errors may be as simple as
an incorrect middle initial or If you find an account reported
address. Or it could be as that does not belong you, you
need to contact the credit of all calls and correspondence.
grantor or issuer immediately.
Remember, finding accounts that The Fair Credit Reporting Act
you have not personally opened is (FCRA) requires the credit
a sign of possible identity bureaus and the agency reporting
theft. the information to the credit
bureau to correct inaccurate
Hopefully you'll discover that information in your credit
this error is nothing more than report. Therefore, it is
an oversight and not an identity important that you contact both
theft problem. Most often this the credit bureau and the
occurs when they report an creditor whose information is in
account belonging to a family dispute.
member or someone with a similar
name on your credit report. A sample letter is included here
to help you in correcting your
If your problem is an error in credit profile. Make sure that
reporting a late payment you will you clearly identify the
need proof to back up your case information that you dispute,
before this error can be include copies of receipts or
corrected or removed. The most documents that support your
common error occurs when a position. Then request that the
payment is reported as "late" information be corrected or
when it was actually a current or deleted from your file.
"on time" payment.
Send your letter by certified
In either case, the problem can mail and request a return receipt
and should be corrected. You from the recipient. Keep all
will need to correct the error in correspondence that you mail out.
writing. Keep a journal or log Give the agencies involved 30
days to begin their +++
investigation. You can call them Sample Dispute Letter
but be aware that phoning them Date
does not protect your consumer
rights! You must notify them in Your Name
writing to protect your rights. Your Address
Your City, State, Zip Code
They must notify you of the
results of their investigation. Complaint Department
Although the process will take Name of Credit Reporting Agency
time, it's important to do it. Address
This is your credit profile, your City, State, Zip Code
"consumer identity" that is at
stake. Don't expect an error to Dear Sir or Madam:
correct itself.
I am writing to dispute the
At your request, the credit following information in my file.
bureaus must send notices of The items I dispute are also
corrections to your credit encircled on the attached copy of
profile to anyone who has the report I received. (Identify
requested your report in the last item(s) disputed by name of
six months. If you applied for a source, such as creditors or tax
job and were turned down because court, and identify type of item,
of inaccurate information in your such as credit account, judgment,
credit report, you can have the etc.)
corrected report mailed to anyone
who received a copy in the past This item is (inaccurate or
two years. incomplete) because (describe
what is inaccurate or incomplete
+++++++++++++++++++++++++++++++++ and why). I am requesting that
the item be deleted (or request
another specific change) to You can also use your credit
correct the information. report to help you plan and
implement a personal budget. Your
Enclosed are copies of (use this credit report will show you where
sentence if applicable and you are spending your hard earned
describe any enclosed dollars. While the credit card
documentation, such as payment balances may not be completely
records, court documents) current, you'll still see which
supporting my position. Please of your cards has the highest
reinvestigate this (these) balance outstanding.
matter(s) and (delete or correct)
the disputed item(s) as soon as If you have more than one major
possible. credit card you should compare
the annual percentage rate (APR)
Sincerely, you are paying on each account.
Your name If you are working on a budget to
"pay down" your credit cards,
Enclosures: (List what you are start by paying down the one with
enclosing) the highest APR or interest.
Originally Posted at href="http://www.ftc.gov/" off, move toward paying off the
title="http://www.ftc.gov/" account with the second highest
target="_blank">http://www.ftc.go APR. Using this method you will
v/ be able to concentrate your
+++++++++++++++++++++++++++++++++ efforts toward paying down your
+++ outstanding credit obligations.
Tip #3 - Budget Planning
You should also check with your judge your credit worthiness.
credit card company to see what's
the best annual percentage rate You want to make sure that your
(APR) they can offer you. If you credit report is accurate before
are a good customer, you can you apply for that sports car or
often qualify for a lower rate new home. Errors or problems
than what you are currently being can be corrected before your
offered. lender can use those against you
and deny your credit request.
Caution: Ask if the new rate you You'll also have a better idea of
are getting is a "promotional" what type or rate of credit you
rate or a "contract" rate. A should expect from a potential
promotional rate will expire at lender.
the end of the promotional term,
for example 6 months. A contract Tip #5 - Check your credit report
rate does not have an regularly
"expiration" as long as you
continue to meet the terms Check your credit report
outlined by your creditor for regularly. Guard your "consumer
that rate. identity" as you would anything
else you treasure. Use your
Tip #4 - Making a major purchase credit wisely, along with these
tips, and you will enjoy the
If you are considering a major benefits that your good credit
purchase such as a car or a home, and your good name deserve now -
checking your credit report gives and for years to come.
you the chance to see what a
potential lender sees and uses to
About the Author:
"© 2005, http://www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "To Your Credit" a FREE weekly newsletter focusing on managing your personal finances and credit. Subscribe and get a FREE copy of your credit report when you visit: http://www.yourfreecreditreportnow.com
Source: www.isnare.com
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