Use Your Free Credit Report To Check Your Financial Health

By James Dimmitt

Use Your Free Credit Report To Check Your Financial Health by James H. Dimmitt

As of Thursday, December 1, 2004, one-third of Americans can now access their credit reports from all three main credit agencies for free. Passed in late 2003, the Fair & Accurate Credit Transactions Act creates a central source consumers can use to obtain a free annual credit report.

Equifax, Experian, and Transunion,the three largest credit reporting agencies, have set up a special site where consumers can request, view, and print their free report. That site is http://www.annualcreditreport.com and is the only authorized site to request your free report(s).

Those without internet access can call toll-free at 877-322-8228 or write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281 to request their report(s). This service, which begins in the west coast, will eventually cover all the states by September 2005.

Here are 4 tips to help you check your financial health with your free credit report:

Tip #1- Check for Errors

The first thing you need to do is carefully check that your credit report is accurate. Nearly 70% of credit reports contain errors.

These errors may be as simple as an incorrect middle initial or address. Or it could be as serious as a creditor reporting that you were late with a payment when in fact you were not late at all.

This error might not seem like a big deal to you. However,to a future lender like a mortgage company, it makes a big difference!

Carefully examine your credit report and if you find an error contact your creditor and the credit bureaus in writing. Catch and correct these errors now before it hurts your chances of securing credit in the future.

Tip #2 - Correcting Errors

The two most common errors contained in credit reports are:

1) wrong account information 2) incorrect recording of late payments.

If you find an account reported that does not belong you, contact the credit grantor or issuer immediately. Remember, finding accounts that you have not personally opened is a sign of possible identity theft.

Hopefully you’ll discover that this error is nothing more than an oversight and not an identity theft problem. Most often this occurs when an account belonging to a family member or someone with a similar name is reported on your credit report.

If your problem is an error in reporting a late payment you will need proof to back up your case before this error can be corrected or removed. The most common error occurs when a payment is reported as “late” when it was actually a current or “on time” payment.

You will need to correct the error by contacting them in writing. Keep a journal or log of all calls and correspondence made to your creditors and credit bureaus.

The Fair Credit Reporting Act (FCRA) requires the credit bureaus and the agency reporting the information to correct inaccurate information in your credit report. Therefore, it is important that you contact both the credit bureau and the creditor whose information is in dispute. Again this must be done in writing to protect your consumer rights.

You can use the sample letter in this article to help settle your dispute. Make sure that you clearly identify the information that you dispute, include copies of receipts or documents that support your position. Then request that the information be corrected or deleted from your file.

Send your letter by certified mail and request a return receipt from the recipient. Keep copies of all correspondence that you send. You’ll have to give the agencies involved a minimum of 30 days to begin their investigation.

Once their investigation is complete, they must notify you of the results. Although the process will take time, it’s important to do it. This is your credit profile, your “consumer identity” that is at stake. Don’t expect an error to correct itself.

At your request, the credit bureaus must send notices of corrections to your credit profile to anyone who has requested your report in the last six months. If you applied for a job and were turned down because of inaccurate information in your credit report, you can have the corrected report mailed to anyone who received a copy of your credit report in the past two years.

++++++++++++++++++++++++++++++++++++ Sample Dispute Letter ++++++++++++++++++++++++++++++++++++

Date

Your Name Your Address Your City, State, Zip Code

Complaint Department Name of Credit Reporting Agency Address City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received. (Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely, Your name

Enclosures: (List what you are enclosing)

Originally Posted at http://www.ftc.gov/

++++++++++++++++++++++++++++++++++++

Tip #3 - Making a major purchase

If you are considering a major purchase such as a car or a home, checking your credit report gives you the chance to see what a potential lender sees and uses to judge your credit worthiness.

You want to make sure that your credit report is accurate before you apply for that sports car or new home. Errors or problems can be corrected before your lender can use those against you and deny your credit request. You’ll also have a better idea of what type or rate of credit you should expect from a potential lender.

Tip #4 - Check your credit report regularly

Check your credit report regularly. Guard your “consumer identity” as you would anything else you treasure. Use your credit wisely, along with these tips, and you will enjoy the benefits that your good credit and your good name deserve now and for years to come.