Managing Finances For A Better Credit Rating
In the world of finances it is all about managing debt to maximize one's buying power. Since a consumer's credit score has a direct correlation on any financing or loan authorization, reviewing the accuracy of a credit report is a consumer savvy. Consequently, managing one's personal finances for a better credit rating is critical.Did you know that when financial institutions consider authorizing loan approval, they review your payment history? Even if you were unemployed when you were inundated with medical bills, the balance will appear on the credit report.FACT: Over thirty-five percent of American consumers impaired with a low credit score -- due to expensive hospital and medical bills.About Your Credit Report CardA credit report is very similar to an adult life quality report card. It details such personal information as:
Credit reports or your report card are kept by organizations referred to as consumer reporting agencies (CRAs). These credit bureaus collect, compile and sell consumers credit documents to businesses.
- Where a consumer works
- Where the individual resides
- Have you ever been convicted of a crime
- Has the individual ever been involved in a lawsuit or claim
- How you pay your bills
Banks and lending institutions approve applications based on credit. Certain insurance companies and employers evaluate one's credit before writing a policy or extending employment.Subsequently, Americans should always review their credit score to ensure the information is accurate. Financial advisors recommend that all consumers should report any updated, omissions or inaccuracies. Specifically, for the person planning to apply for a mortgage, auto loan or other personal loans (secured or non-secured) an exact truthful credit report is important. Moreover, the Fair Credit Reporting Act (FCRA) authorizes consumers the opportunity to submit corrections.Another aspect of managing one's finances with a better credit score is by checking the accuracy of information detailed on the credit file.
Nonetheless, it may drastically accelerate the credit-granting process.On the other side of the spectrum, consumers who are denied credit have the right to acquire the following information:
Generally, the cost of a credit report starts at nine dollars.Credit Reporting Agencies and Credit BureausThere are three major credit bureau agencies (Experian, Trans Union and Equifax). All agencies may have different information about a consumer. To compare and check all your credit files from all the top agencies, here is their address:ExperianP.O. Box 2002,Allen,
- The credit bureau's name (CRA)
- The CRAs address and all contact information
- A copy of a free report within 60 days of a denial
- In lieu of fraud, being on welfare or unemployment, consumers a allowed one complimentary copy of their credit report
EXPERIAN (397-3742)Trans UnionP.O. Box 1000Chester, PA 19022(800) 916-8800EquifaxP.O.
740241Atlanta, GA 30374-0241(800) 685-1111After you obtain a copy
of your credit report, the first step to managing your finances begins
with noting any discrepancies. Then, protect your rights under the
FCRA Act by contacting the source of the erroneous information and
the credit reporting agency by writing a letter.Sample Dispute LetterDate(Your
Information)NameAddressCity, State, Zip CodeComplaint/Dispute DepartmentName
of Credit Reporting BureauAddressCity, State, Postal CodeTo Whom
It May Concern:Attached you will find a copy of a report I received.
The items of dispute are circled on the attached copy of the report
I received.1.) (Detail the disputed items in a list with the credit
account, name of the creditor the type of item, such as credit account
or judgment etcetera)This above item is (inaccurate) because (detail
what item is inaccurate or incomplete and why). I am requesting that
the above named item be removed or corrected (or state the specific
change).Attached you will find copies (describe any enclosures that
depict a record of payments or any court documents) which demonstrate
my position. Please research this issue and (remove or amend) the
disputed item(s) as soon as possible.Regards,Your nameEnclosures:
(List what you are enclosing)Remember to include duplicates (only)
of the documents that corroborate the correction.Facts about Accurate
but Negative Credit Report InformationThere are scenarios where negative
information may be accurate.
Unfortunately, there is a general
period of time that the information must remain on a credit report.
Usually, the time limit is seven months; however the following
list details the exceptions:
despite negative accurate information, paying your
bills on time and correcting any errors is a good way
to manage your finances for a better credit rating.
- Any information regarding criminal
convictions may be reported for an unlimited time span.
credit information provided as a response to an application
for a salary position worth over $75,000 does not have a
- Bankruptcy information can remain on a report
up to ten years or more.
- All credit information reported
as a result of an application worth over $150,000 of
credit or life insurance does not have a limit.
unpaid judgments or lawsuits have a credit report life
of seven years or more -- until the statute of limitations
has expired (whichever is longer).