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CREDIT REPORT
What is a credit report?
Your credit history and other personal information about you,
is collected and kept on file with major credit reporting agencies
(“CRAs”). CRAs provide your credit report information to businesses
that, under the law, have the right to obtain and use your otherwise
private credit information when, for example, you apply for credit,
insurance, or employment. You have a credit record on file at
a CRA if you have ever applied for a credit or charge account,
a personal loan, insurance, or a job. Your credit record contains
information about your debts, and credit payment history. It also
indicates whether you have been sued, arrested, or have filed
for bankruptcy.
Annually, over 2 billion credit reports are sold to businesses,
so most American consumers have had their credit reports looked
at many times each year. However, every year only a small percentage
of consumers ask for and receive copies of their own credit reports.
What’s in my credit report?
Your credit report contains the following types of information:
- Your name and your spouse’s name:
- Where you live, where you work, and where
you used to work:
- Social Security number, prior addresses,
phone number and birth date:
- If you’ve paid bills on time:
- How much credit you have available:
- If you’ve been late with rent or a mortgage
payment
:
- Whether and to whom you have made an application
for credit or a loan:
- Companies who obtained your credit report:
and
- Bankruptcies, foreclosures, court judgments,
convictions or tax lines.
What is a credit or insurance
score?
Credit scores or insurance scores refer to a system used by companies
to assist in evaluating a consumer’s relative creditworthiness,
insurability, or employability. Businesses use a variety of formulas
to translate a consumer’s credit information into a credit or
insurance score. Federal law allows companies to use credit information
including scores, when deciding whether to issue insurance, extend
credit, or hire someone.
Why should I care about possible errors in my credit report?
While a good credit report can help you, errors in your credit
report can cost you money. The General Accounting Office of the
U.S. Congress has stated that accurate credit reports are critical
to the credit process
– for consumers attempting to obtain credit and to lending institutions
making decisions about extending credit. Similarly, the Federal
Trade Commission has told consumers that, because businesses use
credit report information to evaluate consumers’ applications
for credit, insurance, employment, and other purposes allowed
by the Fair Credit Reporting Ace (FCRA), it’s important that the
information in consumer credit reports are complete and accurate.
Industry officials and studies indicated that credit report errors
could either help of hurt individual consumers depending on the
nature of the error and the consumer’s personal circumstances.
Although the government concluded that there was insufficient
evidence to indicate whether significant errors were common or
rare in credit reports, it did conclude that a good way to help
ensure the accuracy of credit reports is for consumers themselves
to review their own consumer credit reports.
If there are mistakes in your credit report costing you money,
only you are in the best position to discover them and do something
about it. You may think you have great credit and don’t need to
worry about it, but you may be surprised at what is in your actual
credit report. Your report may show late payments that were actually
made on time. Or it may fail to show positive information about
your credit, such as accounts that you have always paid on time.
On the other hand, your report may be completely accurate. Unless
you check it yourself, you may not know.
What is identity theft?
Criminals can use consumers’ information
for their own benefit. By stealing a person’s private financial
information, thieves can pose as that person and run up thousands
of dollars in debt in the victim’s name. The Federal Trade Commission
estimates that more than 27 million Americans have been victims
of identity theft in the last 5 years, including 9.9 million Americans
in the last year alone. The sooner you realize you’re a victim
of identity theft, the less damage can be done People whose identities
have been stolen can spend months or years, and their hard-earned
money, cleaning up the mess thieves have made of their good name
and credit record. In the meantime, victims may lose job opportunities;
may be refused loans, education, housing or cars; or even get
arrested for crimes they didn’t commit. The risk of identity theft
is another reason why looking at your own credit report regularly
is so important. In fact, the FBI recommends that everyone check
their own credit report twice a year.
Can I see what is in my credit report?
Yes. If you contact any of the major
credit reporting agencies, they must give you the information
they keep on file about you. There are three major credit reporting
agencies in the country that probably have a credit file on you.
They are Trans Union, 1-800-916-8800, www.transunion.com;
Equifax, 1-800-685-1111, www.equifax.com;
and Experian, 1-888-397-3742, www.experian.com.
There is more information on the back about how to get a copy
of your credit report.
What do I need to know about free credit reports?
There’s no charge for a credit report
if a company takes adverse action against you, such as denying
your application for credit, insurance or employment, and you
request your report within 60 days of receiving the notice of
action. The notice will give you the name, address, and phone
number of the credit reporting agency. Recent changes to the law
now entitle everyone to request one free credit report per year
from the major credit reporting agencies.
To order your free annual report go to
www.annualcreditreport.com
where you can order your report directly or download the Annual
Credit Report Request form to mail in your request. You can also
call 1-877-322-8228. Otherwise, a credit reporting
agency may currently charge you up to $9.50 for a copy of your
report. You are not entitled to a credit score with your annual
free report.
A credit score generally costs $5.95.
The free credit report with a credit score included in this class
action settlement is in addition to any other free report you
might request. Experts agree that you should review your credit
report more than once per year. Since information in credit reports
changes frequently, the FBI advises consumers to check their credit
reports twice a year. Even if you have not been denied credit
or insurance, you may want to see the information in your credit
report. You may sometimes see offers for “free credit reports,”
but read the fine print carefully. They are usually selling you
a credit-monitoring service for a fee that you automatically register
for when you order your “free credit report.”
What is the Fair Credit Reporting Act?
In 1970, Congress passed the Fair Credit
Reporting Act (FCRA). The FCRA limits, among other things, the
occasions on which a company may receive a copy of your credit
report. It also requires the company, if it takes adverse action
against you based in whole or in part on information in your credit
report, to tell you of its decision. The company must also tell
you the name of the credit reporting agency that provided your
credit report to it, and information on how to contact that credit
reporting agency. The company must also advise you of your right
to obtain a free copy of your credit report that was used to take
adverse action against you.
How can I fix errors in my credit reports?
Additional information about these topics
is available at the website www.ftc.gov.
In general, you may notify a credit reporting agency that there
are errors in your credit report, and provide any documents you
have to support your position. Under the law, the agency must
conduct an investigation into the accuracy of the information.
This includes contacting the source of the information that you
believe is incorrect and obtaining verification. Generally, the
agency has 30 days to investigate. After the agency completes
its investigation, it has 5 days to report back to you. If the
agency can’t verify the negative information, it has to delete
it. If the negative information stays in your file, you have the
right to have it marked as disputed information.
No one can legally remove accurate negative information from your
credit report. The Federal Trade Commission suggests that you
be wary of companies that promise “quick fixes” or “repairs” to
your credit.
Where can I get more information about my rights concerning
my credit report?
You can find helpful information at the
following locations:
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