What is a Personal Credit Report?
Upon establishing credit with lending institutions or retail businesses, most lenders will report your payment history information to the credit bureau. The major credit bureaus are Experian, Equifax and TransUnion. The credit bureaus organize the personal credit information on you and your credit history to produce credit reports. The credit reports are available to your current and prospective creditors, and employers as allowed by law. The credit report’s main purpose is to assist a lender in deciding whether to grant you credit. This generally occurs when you are applying for car loans, credit cards, home mortgages, and rental housing.
Personal Credit Report Contents
- Your name and any variations of your name
- Your social security number
- Your date of birth
- Current and previous addresses
- Current and previous employers
- Credit accounts and history
- Public records (liens, bankruptcies, civil judgments, etc.)
Where Do I Get My Credit Report?
You can obtain a copy of your credit report from the credit bureaus as shown:
FTC Issues Final Rule on Free Annual Credit Reports
The Federal Trade Commission (FTC) has issued its final rule regarding free annual credit reports under the Fair and Accurate Credit Transactions Act (FACTA) and the Fair Credit Reporting Act (FCRA). FACTA, which was enacted on December 4, 2003, amends the FCRA and requires the three nationwide consumer reporting agencies—Equifax, Experian and Trans Union—to provide consumers, upon request, a free copy of their credit report once every 12 months.
When Should I Check My Credit Report?
Your credit report should be periodically reviewed for accuracy. It is advisable to obtain your credit report in advance of making a major purchase such as a vehicle or home. At the time of marriage or divorce your credit report should be reviewed during the transition. Your credit report also should be reviewed in the event of a death of a spouse.
What Are My Rights Regarding My Credit?
The FCRA is designed to promote accuracy, fairness and privacy of information in the records of every “consumer reporting agency” (CRA). CRAs are better known as credit bureaus. For more information on your specific rights, visit www.ftc.gov. Contact your state or local consumer protection agency or a state attorney general for more information on your rights under state law.
Highlights of Your Rights
- Access to your credit file is limited;
- Your consent is required for credit reports provided to employers or reports that contain medical information;
- You have the right to a copy of your report;
- You must be told if information in your report has been used against you;
- You can dispute inaccurate information with the CRA;
- Inaccurate information must be corrected or deleted by the CRA;
- You can dispute inaccurate information with the source of the information;
- Outdated information may not be reported;
- You may choose to exclude your name from CRA lists for unsolicited credit and insurance offers, and
- You may seek damages from violators.
How Is My Credit Rated?
A credit score is produced using information from your credit report and statistical models that vary in the financial service industry. Your credit score changes as the information in your credit report changes. Typically, the credit score is produced by the CRA when a lender requests your credit report and the score then becomes a part of your credit report. Individual lenders may produce their own credit scores. Credit scores assist lenders in assessing risk in a fair manner because they are objective and consistent.
How Do I Protect and Improve My Credit?
Paying your bills on time is the single most important factor in maintaining good credit. In addition, you will want to avoid overextending yourself or applying for additional credit that is not needed. Keep your debt low on credit cards or other “revolving credit.” Pay off debt instead of moving it around. Owing the same amount but having fewer open accounts may lower your credit score.
How Do I Exclude My Name from Unsolicited Offers?
To reduce solicitations for credit offers by mail, contact 1-888-5 OPT OUT (1-888-567-8688). You will be given a choice to opt out for five years or permanently. You may also visit www.optoutprescreen.com to make this choice electronically. There is generally a small fee to process this electronically, however it is free of charge by mail.
How Do I Minimize My Risk for Identity Theft and Fraud?
The following are tips to protect yourself and reduce your risk for credit card fraud and identity theft:
- Carry only the ID and cards that you need;
- Sign all new credit cards immediately;
- Do not make Internet purchases from unsecured web sites;
- Try to memorize your passwords rather than writing them down;
- If you expect a new credit card and it does not arrive in a reasonable time, contact the issuer;
- Have your mail collected by someone you trust in your absence;
- Shred, rather than throw away, all documents that contain any personal information;
- Destroy all carbons;
- Always retain your receipts when you make a purchase;
- Create passwords that are not obvious;
- Do not confirm any information about yourself by phone or with door-to-door solicitors;
- Treat your credit cards like money—secure them safely;
- Do not print your social security number on your checks;
- Do not give your credit card number over the telephone unless you initiated the call, and
- If you do not receive you credit card billing statement, immediately notify the company.
By knowing your rights, taking precautions and consistently reviewing your credit report, you will be taking the correct steps in the basics of cash management by protecting your credit. By educating yourself and acting responsibly you have discovered the keys to maintaining good credit. Maintaining good credit is a basic step to financial success! For more information regarding this topic or any other tax-related issue, contact Henssler Financial at 770-429-9166 or [email protected].