by Dan Krell © 2009
Did you have a “permanent record” in school? Well, believe it or not, you still have a permanent record; it is called your credit report. Because your credit report can influence more than your ability to get a mortgage, it’s important to ensure that it is accurate.
Many in the credit industry call the credit report a “snapshot” of your credit use; how much credit you take and how you pay it back. In truth, it’s a bit more; it’s a snapshot of your life. The Federal Reserve board of San Francisco (frbsf.org) describes a typical credit report as containing personal identifying information, credit information, public information, and inquires into your credit report. Besides indicating your name (and aliases), birthday and social security number, your credit report may also indicate your current and past addresses, current and past telephone numbers, and current and past employers. Your credit report may also indicate your present and past spouses along with their personal information!
The credit information indicated on your credit report usually includes revolving credit (such as credit cards) and installment loans (which includes mortgages, auto loans, and student loans). The information reported includes the date the account was opened, the amount loaned and/or credit limit, the type of account, any co-signer, and of course your payment history. Additionally, the report also indicates collection activity undertaken to have you repay any unpaid accounts. Collection activity can be reported for charged off credit cards, foreclosure, and for such items ranging from hospital bills to child support.
Public information refers to records kept in the county, state, and federal courts (and is available to the public). Information that may appear in the public records section includes bankruptcies, personal liens, and judgments.
Anyone claiming that they have a legitimate need to see your credit report can order it through one of the credit reporting agencies; these inquiries are listed in your credit report. Besides banks, lenders, and those who extend credit, others who may be able to view your credit report include (but not limited to) employers, landlords, child support enforcement, and government agencies.
Credit reporting agencies such as Equifax (equifax.com), Experian (experian.com), and Tran Union (transunion.com) act as information repositories and collect all the information described above. Besides collecting information about you from creditors and public records, it is possible that credit reporting agencies may accrue information from other sources too. The information that is accrued about you is analyzed to produce your risk score. Each credit reporting agency uses a complex algorithm to compute your score which is widely used in decisions to extend you credit.
Given the amount of information that is processed by credit reporting agencies, it is common for errors to appear. To ensure your credit report information is accurate, you have the right to receive your credit report from each of the credit reporting agencies once a year. You can order your credit report either from annualcreditreport.com or from each of the credit reporting agencies (see above). You can dispute any errors by following the instructions for each credit reporting agency. For additional information on disputing credit report information you can refer to each of the crediting reporting agencies above as well as the Federal Trade Commission (FTC.gov).
This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of September 14, 2009. Copyright © 2009 Dan Krell