There are 3 credit reporting agencies-Trans Union, Equifax and Experian. Their job is to take the information provided to them by creditors, loan agencies, bankers, mortgage companies, car companies and much more and report on how you handle your credit. this is from if you pay on time and if not when, how much you pay (do you pay off monthly), number of lines or credit cards you have and utilization rate and inquiries. The things that will raise your score the quickest are paying off early and fully every month, and how you utilize that credit-for example: let’s say you have a $1,000 limit on a credit card. What they want is for you to utilize no more than 30 to 35% of that limit monthly. This means they do not want you to spend more than 300 to 350 of that thousand each month-any more than that and they think you have a problem with needing that money more than you should-even if you pay it off monthly.
Please remember that a credit report is all about credit, not savings or anything else, it is simply a way to measure how much you spend, how you spend it and where. Your goal, in terms of getting out of debt, becoming self-sufficient, using cash and having enough cash and emergency funds to never need credit again, and as Dave says-not need a credit report.
The steps to take to ensure your credit report is accurate:
- Make sure the information & facts are correct– Incorrect mailing addresses
- Inaccurate Social Security Numbers
- Former employers
- Indicators of identity theft
- Errors in your credit accounts
- Inquiries that you don’t recognize
Correct wrong or inaccurate data-remember these agencies generally have 30 days to address and correct your submissions.
Address problem areas like your utilization rate.
Follow up: make sure to go back in 30-60 days and check your corrections.
Monitor your credit regularly.
Please understand there are mistakes made on these reports all the time-here are a couple examples:
A husband and wife getting divorced but who have items that are joint-in other words show up on both reports-you might wind up with your spouses’ debt and record.
A title search on a home showed someone trying to get a mortgage had a state tax lien against them
it turned out they could not get their home loan because of this and what happened was that someone else with the exact same name is who had the lien but the agency made the mistake of putting it on your report, so you had to file and affidavit to show it really did not belong to you.
The other huge item is ID theft-I highly recommend you get ID theft insurance-will probably run you as a couple around 140.00 per year-they will monitor everything you ask them to, send you monthly reports and assist you in clearing up problems if they arise. I recommend Zander insurance for this.
Another thing that happens frequently causing much stress is creditors hounding you all the time for money, but know that these people are regulated through the Fair Credit Reporting Act as to what they can and cannot do to collect from you.
What is the function of the Fair Credit Reporting Act?
Key Takeaways The Fair Credit Reporting Act (FCRA) governs how credit bureaus can collect and share information about individual consumers. Businesses check credit reports for many purposes, such as deciding whether to make a loan or sell insurance to a consumer. FCRA also gives consumers certain rights, including free access to their own credit reports.
Who is covered by the Fair Credit Reporting Act?
Fair Credit Reporting Act (FCRA) and Employment. When employers conduct a check of your background (including credit, criminal, past employer checks) using a third party, the background check is covered by The Fair Credit Reporting Act of 1970 (FCRA). Below, learn more about FCRA, and how it impacts any background checks done by employers.
What to know when collection agencies come after you:
What are collection agencies not allowed to do?
For example, the law prohibits collection agencies from using harassment, misleading, and unfair practices. The law prohibits unnecessary disclosure of the debt to parties not obligated to pay the debt.
Is it illegal for a debt collector to use unfair practices?
The FTC enforces the Fair Debt Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts. Here are some answers to frequently asked questions to help you know your rights. What To Know About Debt Collection What To Know About Old Debts
Does ignoring a debt collector make them stop contacting you?
Ignoring or avoiding a debt collector is unlikely to make the debt collector stop contacting you. If you believe you do not owe the debt, you should tell the debt collector. Read more The Fair Debt Collection Practices Act (FDCPA) says that a debt collector is not allowed to use unfair practices in trying to collect a debt.
Bottom line is that as a consumer, you have rights and methodologies to put a stop to abusive collectors. You should know these and how to use them and always document everything you do and everyone you talk to and dates.
The last thing I want to briefly address here is protecting yourself from ID theft-this includes things like protecting and changing your passwords frequently, not using same passwords on everything, know how your computer is set up and what information can get disseminated based on your settings for security and privacy, do not give out lots of info especially on things like (about you) on Facebook and similar sites-things like, phone, address or date of birth. Make sure you carry and monitor ID theft insurance items. Keep private information private. Watch the info you provide on things like credit cards and driver licenses.
