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  Doctors Have X-rays, Lenders Have FICO®
Credit Reports: Frequently Asked Questions
Questions? Call Now 877-647-6203
(608) 647-6203
What is a credit report?
A consumer credit report is a factual record of an individual's credit payment history. Its main purpose is to help a lender quickly and objectively decide whether to grant you credit.
If you have any type of a charge account, car loan, student loan or home mortgage, then information about you is probably stored in a consumer credit database. Most of the information in your consumer credit report comes directly from the companies you do business with, but some information comes from public records.
What information is on a consumer credit report?
The typical consumer credit report includes four types of information:
- Personal information: your name, spouse's name, current and previous addresses, Social Security number, year of birth and current and previous employers. This information is gathered from credit applications, so its accuracy depends on filling out the forms completely and consistently each time you apply for credit.
- Credit information: specific information about each account such as the credit limit or loan amount, balance, monthly payment and payment pattern during the past several years. This information comes from companies that do business with you.
- Public information: federal district bankruptcy records; state and county court records, tax liens and monetary judgments; and, in some states, overdue child support.
- Inquiries: the names of those who obtained a copy of your credit report for any reason. This information comes from the credit-reporting agency, and it remains on record for up to two years, consistent with federal law.
How long does information stay on a consumer credit report?
Federal law specifies how long negative information may remain on your credit report. To prevent past errors from haunting you forever, most negative information must be erased after seven years. This includes late payments, accounts that the credit grantor turned over to a collection agency and judgments filed against you in court--even if you later paid the account in full. Credit reporting agencies use the date of original delinquency or, in the case of public records, the date of filing to determine when negative information is deleted. Positive information remains on your report indefinitely.
The length of time a bankruptcy remains on your credit report depends upon which type of bankruptcy you file. Chapters 7, 11 and 12 remain for 10 years. A Chapter 13 bankruptcy (in which you repay part or all of your debts under a court-approved payment plan) remains on your credit report seven years.
Inquiries made on your credit history remain on your credit report between one and two years, depending on the type of inquiry.
How consumer credit reports are used?
Federal law specifies who may obtain a copy of your credit report and how it may be used. Specifically, you may request a copy at any time, but no one else may legally review your report unless they do so in connection with one of the following:
- Your application for a government license
- A credit transaction or other legitimate business need
- Employment purposes such as hiring or promoting
- Underwriting insurance
- A court order or federal grand jury subpoena
- Your written instructions
What do lenders consider before granting you credit?
Though all credit grantors are different, in general their decisions boil down to a single issue: If they lend you money, send you a credit card, or give you goods or services, will you pay them back? To help them predict the answer to this question, lenders consider:
- How much money you make
- How long you've lived where you live now
- How much your home, car or other assets are worth
- How much money you have in the bank
- Whether you pay your bills on time
- How long you've worked for the same company
- How much money you owe to others
These factors fit into three categories, which are known as the "three C's of consumer credit."
Character: Your length of residency and employment give credit grantors an indication of your personal character. They get this information from your credit application. Lenders evaluate your financial character by reviewing your existing credit relationships: credit cards, bank loans, mortgages, etc.
Capacity: Your living expenses, open credit limits, current debts and other payments give lenders a sense of how much debt you can realistically pay given your income.
Collateral/capital: Whether the loan is secured by a down payment or asset--and how much that down payment or asset is worth --helps lenders determine the terms of the credit or loan they extend to you.
What should I do if I believe I have been a victim of credit fraud?
There are several types of credit fraud, many of which involve the illegal use of your credit card numbers, or setting up new accounts in your name. If you suspect ANY improper or illegal activity is taking place, immediately contact each of the credit grantors with whom you have credit. Learn more about what to do in case of identity fraud.
How does divorce affect consumer credit?
A divorce does not supersede the original contract with the creditor, and does not release you from legal responsibility on any accounts. You must contact each creditor individually and seek their legal binding release of your obligation. Only after that release can your credit history be updated accordingly. Learn more about the impact of marriage on your credit.
How do I correct my credit report if it contains Incorrect information?
According to a 2002 Study by the Consumer Federation of America, significant discrepancies exist among the three credit bureau files of many consumers. Credit reports are often inaccurate, but under the Fair Credit Reporting Act you have the right to dispute the accuracy of any information in your credit report. Learn more about how to dispute incorrect information.
What is in my credit file that may keep me from obtaining credit?
Each credit grantor has established criteria for making credit decisions. Your credit may appear to be perfect, but having too much credit or too many outstanding balances are examples of why your request for credit might be declined. Sometimes the decision is not even based directly on the credit file. For instance, you may not have been at your current residence or in your present job long enough. If you have any questions about why you were not approved for credit, you may want to contact the credit grantor who turned you down and ask them for an explanation.
What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act (FCRA) is the federal law regulating credit reporting companies. This law protects consumers' rights, such as the right to review and contest information in their credit profiles. It also specifically defines who can access the information in a credit profile, and how you are notified of this activity. You may obtain information about the FCRA, including its full text, at http://www.ftc.gov/bcp/conline/edcams/fcra/index.html.
Encouraging Consumers to Take Charge of Their Credit
U.S. Residents Can Access Credit Data Free Annually Starting December 1
November 23, 2004 - Consumers are getting a jump start toward their financial literacy next week. Starting December 1, U.S. residents in the Western states will be able to access their credit reports for free online at www.annualcreditreport.com, by phone or by mail. Under the Fair and Accurate Credit Transactions (FACT) Act consumers can request their credit reports every 12-months. The first roll-out region includes residents in Alaska, Hawaii, Washington, Oregon, California, Idaho, Nevada, Montana, Wyoming, Utah, Arizona, Colorado and New Mexico. The Midwest will have access to their personal credit reports in March 2005, the South in June 2005 and the Northeast in September 2005.
While reviewing your free annual personal credit report is a good way to ensure that your credit report is in order, an annual check is just one part of understanding your creditworthiness.
"The free personal credit report is a terrific first step toward managing your credit," said Colleen Martin, TransUnion's Vice President of Corporate Affairs. "However, consumers who are trying to improve their credit scores, guard against identity theft or prepare for a loan may need a more comprehensive view of their credit health."
"To see their credit as lenders do, consumers need to grasp a much fuller credit scenario-including their credit scores," explained John Danaher President of TrueCredit, TransUnion's direct to consumer business. "Credit savvy customers should regularly check their credit report and scores in order to get the full picture, and they should consider signing up for a credit monitoring program. Consumers can save thousands and get the best deals on life's major purchases by carefully managing and improving their credit.
TrueCredit's mission is to help consumers understand and manage their credit. Through online educational materials, free monthly newsletters and easy-to-use credit products, TrueCredit educates consumers about credit management and empowers them to improve their borrowing habits. To learn more, please visit www.truecredit.com.
For more information on CREDIT REPORTS and CREDIT REPAIR. . . .
PLEASE READ THE FOLLOWING....
KNOWING AND UNDERSTANDING YOUR CREDIT
BUILD A BETTER CREDIT REPORT
CREDIT SCORES-HOW THEY AFFECT YOUR MORTGAGE
How PRIVATE is my Credit Report?
How to "OPT OUT" of receiving Offers by mail?
Private Mortgage Insurance, questions and answers!
FACTA, The Fair and Accurate Credit Transactions Act:
Consumers Win Some, Lose Some.
 
Visit http://www.privacyrights.org/
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"Feel free to contact our office if you have any questions regarding your credit report."
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Darold (Daryl) Beier
AT HOME MORTGAGE, LLC
Loan Originators Lic. #31203
Corporation Lic. #43940
2315 Hwy 14 East
Richland Center, WI 53581-8922
"Across From the Dairy Queen"
info@beiermortgage.com
TOLL FREE (877) 647-6203
Office: 608-647-6203 Cell: 608-604-4899
Fax: 775-458-6913 Fax: 608-647-6204 Fax: 608-647-6857
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