Successful Strategies For Clearing Black Marks On Your Credit Report

Mistakes Happen Why Checking your Credit Report Often is Important



When a credit report contains errors, it is often because the report is incomplete, or contains information about someone else. This typically happens because: The person applied for credit under different names (Robert Jones, Bob Jones, etc.). Someone made a clerical error in reading or entering name or address information from a hand-written application. The person gave an inaccurate Social Security number, or the lender misread the number. Loan or credit card payments were inadvertently applied to the wrong account.

Some incorrect data, however, is an indication that you have been the victim of fraud or identity theft (for example, someone has applied for credit in your name or used your credit without your permission). It's crucial that you catch these mistakes and take action to fix the data on your report.

Every time you apply for credit, you're giving lenders permission to see your credit report. And other creditors with a qualified purpose such as sending you a pre-approved credit card offer can check your report without your permission. So shouldn't you see what they're seeing?

Be proactive and check your credit report on a regular basis. Not only will you be better prepared for negotiations with lenders, you can also get early warning signs of fraud.

You should review your credit report from the three major U.S. credit reporting agencies (Equifax, Experian, and TransUnion): At least once a year and especially before making a large purchase, like a house or a car.

Credit agencies charge a small fee for reports. However, you are entitled to one free credit report from each of the three major credit agencies once a year. You must order your free credit reports through www.annualcreditreport.com. In addition, youre entitled to a free report. These times include within 60 days of being denied credit, insurance, or employment or if youre on welfare or if your report is inaccurate because of fraud, including identity theft.

If you find an error, fill out the dispute form provided by the credit-reporting agency. The credit-reporting agency must investigate and respond to you within 30 days. You can get your credit report from many sources, but only the credit agencies can actually correct the data on your report. Contact the three major credit agencies directly.

If you are in the process of applying for a loan, immediately notify your lender of any incorrect information in your report. Your lender will need to reorder your credit report and score once any changes have been made to your information at the credit-reporting agency. Fixing small errors may have little or no effect on your score, but correcting significant errors may have a much more meaningful impact.

Although each credit reporting agency formats and reports information differently, all credit reports contain basically the same categories of information: Your name, address, Social Security number, date of birth, and employment information are used to identify you. These factors are not used in scoring. Updates to this information come from information you supply to lenders.

Lenders report on each account you have established with them including; The type of account (credit card, auto loan, mortgage, etc.), the date you opened the account, your credit limit or original loan amount, and your account balance. Even if you pay off your credit cards in full each month, your report may show a balance on those cards (generally the total balance of your last statement). It will also include your payment history. Late payments stay on your report for seven years and finally it will list all closed accounts.

When you apply for a loan, you authorize your lender to obtain a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years.

The report you see lists both "voluntary" inquiries, spurred by your own requests for credit, and "involuntary" inquiries, such as when lenders order your report to offer you a pre-approved credit offer through the mail. Self-inquiries and involuntary inquiries are not factored into your credit score.

It is for the above reference reasons that checking your credit report often is so important.

Before you settle on any type of mortgage, diligently compare the various mortgages available for your situation.

Fraud Alert How to Clean Up your Credit when Someone Else Ruined It



If you suspect you are a victim of identity theft or if you know you are, what should you do? Identity-theft victims don't make the mess. But they do have to clean it up. There's no one who can do it other than the consumer whose credit was ruined by someone else. New initiatives can help identity-theft victims start the long process of proving to creditors, collection agencies and law enforcement officials that they are who they say they are. But the burden of proof still rests squarely on victims' shoulders. First, alert the police in your city.

You may also need to report the crime to the police departments where the crime occurred. Make sure the police report lists all fraud accounts. Give as much documented information as possible. Get a copy of the report and send it to the creditors and the credit-reporting agencies as proof of the crime. Keep the phone number of your police investigator handy.

Typically identity theft falls into three categories: Financial identity theft: This most commonly occurs when the Social Security number (SSN) and name is used to establish new lines of credit. Criminal identity theft: This typically occurs when a person "borrows" the information of the minor to get a driver's license. This person may be an illegal immigrant who bought the information or a relative who has had a license suspended or revoked. Identity Cloning: Most frequently, profilers have people in positions where they are able to collect information about minors and then sell it on the black market. The most frequent purchasers of this information, in our experience, are illegal immigrants or people who are trying to "restart" their lives and avoid arrest. It is also an open door to terrorists.

The Federal Trade Commission provides standardized fraud declaration reports that victims can file with banks and creditors. Instead of filling out a separate fraud packet for each creditor, victims fill out a single fraud declaration and send signed copies to each creditor.

The ID Theft Affidavit is most valuable when a new account has been opened in the victim's name. The FTC advises victims to contact each of their creditors to verify that they will accept this form. Most do, but some companies will require more or different forms. This initiative could save victims time and quite a few headaches. When a consumer disputes information on a credit report, the credit agency contacts the creditor and passes along the consumer complaint. The creditor then checks its records and decides whether the data it furnished to the credit agency is correct. If the creditor stands by its information, the data stays on the consumer's credit report.

The nation's three credit-reporting agencies have streamlined the fraud alert process. Once an identity-theft victim calls any one of the three credit-reporting agencies, Trans Union, Equifax or Experian, that agency will contact the other two. The toll-free call will automatically trigger a fraud alert to be placed on the victim's credit report at each agency within 24 hours. In addition, the victim will be automatically opted out of preapproved offers of credit and insurance for two years, and upon request, receive free copies of their credit report from each agency within three business days.

A fraud alert asks future creditors to contact the victim before any new credit is approved. The purpose of these alerts is to help prevent an impostor from applying for and receiving more credit in a victim's name.

Needing to make just one call helps victims to be able to act quickly when fraud strikes. No more maneuvering their way through the voice mail systems of the three major credit agencies, each with a separate process for reporting fraud. No more waiting weeks for a credit report to arrive.

Identity-theft victims are urged to contact creditors on their own. Creditors receive heaps of consumer disputes from credit agencies every month. Mixed in with complaints from identity-theft and fraud victims are protests from folks contesting negative, but accurate, credit information. The best way for fraud victims to stand out amid all these disputes is to contact creditors individually. Unfortunately, there's no way to "make" a creditor or a collection agency believe an identity-theft victim.

There also doesn't seem to be a way to make creditors heed the fraud alerts that victims place on their credit reports. A fraud alert is supposed to stop a creditor from granting more credit to an impostor. But an alert will only work if a creditor takes the time to read it. This doesn't always happen. Plus, some creditors grant credit without even pulling a person's credit report.

So identity-theft victims end up monitoring their credit reports and disputing inaccurate information long after learning of the crime. It's the only way to keep their credit reports clean.

Once you're a victim, you're a victim. You can't undo that. It's a matter of minimizing the damage.