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Wednesday, February 18, 2009

Understanding Your Credit Report .... Small Business And Personal

Understanding your credit report and what effect it may have on your financial decisions can seem like a daunting, confusing, and sometimes nerve-racking task. Especially in the tough economic times we are facing today, many people may be reluctant to check their credit report, in fear that it could be more bad news. Your credit report, however, can have a large impact on your personal finances, including your decisions on purchasing a car or home, or the loans you get, job you take, and future savings you make. The Federal Trade Commission (FTC) provides specific information and resources on how exactly to check your credit report and what your credit report means for your future.

What is a Credit Report?

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

Why should I request a copy of my free credit report?

▪To make sure the information is accurate, complete, and up-to-date before you apply for a loan for a major purchase like a house or car, buy insurance, or apply for a job.

▪To help guard against identity theft. Identity thieves may use your personal information to open a new credit card account in your name and then not pay the bills, which will show up on your credit report.

How do I order my free report?

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The three nationwide consumer reporting companies have set up a central way to contact them:

▪Visit Annual Credit Report

▪Call 1-877-322-8228

▪Complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form can be found at Credit Report Request

Do not contact the three nationwide consumer reporting companies individually; use this central contact information instead. Through this contact information, you can choose to either get a credit report from all three consumer reporting companies at the same time or space out your credit reports over the 12 month period, opting for a credit report from one company at a time. For more information on access to your credit report, click here.

What if I find errors — either inaccuracies or incomplete information — in my credit report?

By law, you are responsible for correcting inaccurate or incomplete information in your report. To take full advantage of your rights under this law, contact the consumer reporting company and the information provider.

1. Tell the consumer reporting company, in writing, what information you think is inaccurate. The consumer reporting company will investigate the items in question — usually within 30 days. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.

2. Tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct — that is, if the information is found to be inaccurate — the information provider may not report it again.

For more information on how to dispute a credit report error, click here.

Are there other times I am eligible for a free credit report?

Besides the three credit reports you get from each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion – you are also entitled to a free report if a company takes adverse action against you, like denying your application for credit, insurance, or employment, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.

If you are not satisfied with your credit report, there are ways you can improve it. For instructions on how to build a better credit report, click here. For information on using a credit counselor or debt management plan, click here.

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