How To Find Out What Credit Agencies Are Saying About You - Brief Article

Ebony, July, 2000

You may not know it, but businesses and credit agencies are talking about you behind your back, circulating reports and giving intimate, sometimes erroneous and painful, details of your financial life.

Did you miss two car payments when you were ill?

Did a creditor take you to court for refusing--rightfully--to pay for shoddy work?

Did your ex-wife or ex-husband spread false reports about your money-laundering habits?

All these and other items, including false and incomplete information, may be in the credit reports that agencies use to determine your credit rating. Some 2 billion pieces of information are downloaded every month to update the information on you and other consumers. With so much information going into the system and no one to verify whether it's a rumor or a fact, it's nearly impossible to prevent mistakes. It's even possible for someone else's credit report to "bleed" into your file.

To make things worse, there is not one, but at least three major credit files maintained on you from three different companies. In addition to the "big three" credit agencies--Equifax, Experian, TransUnion--smaller agencies also sell information about your financial life. With so many people circulating so much information, it's vitally important that you find out what they are saying about you.

"If you don't check your credit report at least twice a year, you're going to find all kinds of problems," says Dean Taylor, a business manager for an automobile dealership outside Atlanta. "It is crucial."

Taylor, who's worked at the dealership arranging financing and checking credit reports for seven years, says that the "big three" credit bureaus are not credit verifiers; they simply report information they receive.

Many times that's not enough. A poor credit report can lead to a negative credit rating, which in turn can result in a denial of a home or car loan, apartment rental or even a job. So it's important to verify the information on your credit report and protect your credit rating. Don't wait until your house is on the market and the bank's holding up your new home or car loan because of a fixable mistake.

OBTAIN COPIES OF EACH REPORT

The first step in verifying or correcting your credit report is to actually see a copy of the report. Make sure you check credit reports from all three credit bureaus, because information may be reported differently. Visit the Equifax, TransUnion or Experian Web sites or one of the many online credit services to obtain a copy of your credit report at least once a year to keep track of truth and fiction. You also can order your credit report by phone or mail.

Expect to pay between $8 and $15, unless you live in Colorado, Georgia, Maryland, Vermont, Massachusetts or New Jersey, where it's free. You may also qualify for a free copy of your credit report if you've recently been denied credit, are a victim of fraud, have moved, or become unemployed.

Mary Grate-Pyos, a financial expert in the Washington, D.C., area says the individual credit report basically tells everything about your financial life. It shows your spending habits, employment record, how often and when you make payments, and how much credit you have. "More often than not," Grate-Pyos says, "there's incorrect information on the credit report."

RECOGNIZE COMMON MISTAKES AND REPORT THEM

Improperly recorded payments are the most common disputes on credit reports, says Taylor of Atlanta. Whether it be a late fee that you didn't know about or the wrong amount recorded by the bank, it's important to stay on top of your credit accounts.

The Fair Credit Reporting Act requires creditors to give accurate information to credit bureaus and gives bureaus 30 days to correct the mistakes. Creditors have 30 days to respond to a request or the credit bureau will delete the information for lack of verification. If errors aren't deleted within 30 days, send a complaint to the Federal Trade Commission's Consumer Response Center. It's up to you and the creditor to make sure the information is correct.

If the investigation doesn't resolve the dispute, you may add a brief statement to your credit report that explains your position on disputing the report. For example, if you got behind on your bills because of medical reasons, a death in the family or unemployment, potential creditors may take that under consideration.

AVOID THE QUICK FIX

Watch out for the seams that promise to clean up your credit for a fee. Legally, correct information can't be taken out of your report. Nevertheless, some companies charge high fees to "fix" your credit report by giving you a fake Social Security number or taking out your middle initial. They even write to the creditor to dispute the claim--something you can do for free.

If your report contains negative information that you know is true, fix the problem yourself. Arrange for payment so that you can start to rebuild your credit record. And if you're unable to pay the bill for some reason, contact your creditors and tell them you intend to pay the debt. In some cases, they will give you additional time before reporting you to a collection agency.