Credit Reports

It is a common occurrence to have errors in credit reports. Someone with an identical name as yours may have committed a liable offence and the information is recorded against your name. Some other person may have died and for one reason or the other the information gets into your report. It could be that an account which does not belong to you is put in your record. The issue of the error may not crop up until you decide to apply for a mortgage, car loan, or credit and you find out that you cannot access the facility because your report is filled with accounts of other people who bear similar names with you. How do you avoid being a victim of this problem and set the record straight? What process do you go through to get your report to become accurate? Here are a few tips which can assist you to overcome the problem.

CHECK YOUR CREDIT HISTORY REGULARLY

Ensure that you regularly check your credit history. An error in your record may mean that you might be turned down by the creditor, an employer, or other people who may need a report for one thing or the other. To forestall the possibility of having an error, you must regularly ask for your report, and you must look out for errors.

FIX THE ERRORS

It is not enough to look for errors alone, you should also put in motion initiatives to have them corrected in case they are present in your record. The first thing to do after discovering inaccurate information is to gather the documentation on the item or items that support your view that there has been a mistake in the report. Along with the copies (not originals) of the documents, you can file your complaint by a certified letter to the consumer reporting companies and your creditors, not forgetting to include your social security number, date of birth, name, address, and other relevant information. You may also file your dispute through the phone and the web.

CONTENT OF LETTER

The content of the certified letter must also contain the name of the company that wrongly provided the information to the credit reporting bureau as well as the nature of the transaction on the item that generates the dispute. The letter should also ask for corrections to be made about the inaccurate information contained on the record and a change in any personal information which is in error.

UNRESOLVED DISPUTE

Sometimes, the issue has not been resolved to your satisfaction or settled in your favor and you may be thinking of taking a legal action to clear your name and ensure that your record is clean. There is no law in that says you cannot take legal action over the issue. In that case, you should ask the credit bureau to file all the documents with respect to the dispute in your record for future reference. You will do yourself some good by keeping the documents in a safe place.

The parameter to judge your financial health at any point in time in our society is through the credit score. The credit score is that figure that determines whether or not you should be given credit by a lender or not, and the kind of credit facilities suitable for you. The risk you constitute to lender is also represented by the credit score. The credit score also influences the amount of interest you will be charged against the loan based on the pattern of your credit history and other indices that form the credit score. Here are some the indices taken into consideration in the calculation of your credit score.

PAYMENT HISTORY
Your credit file contains the history of your payments in the past and the pattern of your payment now. Your payment history takes 35% of the marks that constitute the credit score. When you make payments promptly and responsibly, you earn a good chunk of this 35%. Perpetual lateness in making payments against your bills, irresponsible payment patterns, and other negative tendencies make you to earn a low score on payment history and may ultimately lead to you being disqualified from most forms of credit that are available to those who have a good payment history.

CREDIT HISTORY
Your credit history is also contained in the credit file. This takes about 30% of the weight of the credit score. The credit history will show the pattern in the credit reports related to you. It will also show the types of credit you take and the frequency of them. While taking credit is necessary in todayís world, it is advisable to be prudent and responsible about it.

LENGTH OF CREDIT HISTORY
Another factor, which determines the new credit enquiries in your credit file forms 10% of the credit score. The number of new credit enquiries, as well as the amount of the new credit, counts for or against you. The ability to understand the appropriate new credit enquiries will earn you high marks on the credit score, while ignorance of them will give you a low credit score and make you to be a high risk debtor.

TYPES OF CREDIT
The types of credit forms 10% of the weight of a credit score. This assists the lender to assess your credit pattern. It also enables the service providers, your landlord, and others who may be interested in your credit profile to form an opinion about the level of risk involved in providing you with their services.