Credit report companies are bureaus that collect and distribute all credit related information about you. They are actually storage houses of information and if this information is inaccurate, your credit status will be affected badly. There are many thousands of lines of information about you in the database of the credit report companies. It is not easy for lenders to sort through all this information. This is the reason these credit report companies offer credit scores rather than listing through all information in your credit reports.
Credit scores are generated by a computer program that goes through your credit reports. This program will identify characteristics, patterns and warning signals in your credit history. A credit score is evaluated based on what is found by this program. Credit score was intended earlier for decisions on lending. Today, reports and credit scores are also used in other areas. Credit status is now being used for employment and insurance approvals.
Credit Report Companies and Consumer Rights
It is important for you to get a good credit rating. Creditors examine your credit history when they assess your credit application. They utilize this history when they decide on giving or denying your credit. Credit problems can arise when there is a temporary loss of income or an ailment that keeps you from work. Credit problems cannot be solved quickly. It may take patience. The Federal Trade Commission (FTC) gets the credit laws enforced to protect your rights to get the credit and to maintain it. These credit laws protect your rights by requiring the business establishments to give all consumers an equal opportunity to get credit and to solve the disputes over credit errors.
Credit report companies sell the information in your credit report to businesses that use it to assess your applications for credit, home mortgage, employment or insurance. You have the right to receive a copy of your credit report at your request, once a year. You are entitled to know about the companies who asked for your credit report within the past year. Should there be a dispute, you have a right to add an explanation as a summary to your credit report if your dispute is not resolved to your satisfaction. The Equal Credit Opportunity Act (ECOA) forbids credit discrimination on the basis of race, sex, marital status, religion, national origin or age.
Solving your Credit Problems with Credit Report Companies
Your credit report influences your purchasing power and your opportunity to get credit. If the negative information in your report is factual, only duration of time can get that removed. Credit report companies can report accurate information on your report that is negative in nature for seven years and bankruptcy related information for ten years. There is no time limit on reporting the information about criminal convictions. The same applies for job related information.
If you have problems when you pay your bills, you can contact your creditors as early as possible and work out an alternate payment plan with them that reduces your payments to a level that is manageable. You should not wait until your account is handed over to a debt collector. When you are in doubt, you have to request a written confirmation of a debt. You have to keep all your original documents like receipts, sales slips and billing statements. You will need them if there is a dispute about the information on your credit report. There are some well known credit counseling organizations who can advise you on how to manage your debts and money and they will help you work out a budget. They also offer free educational material.
Credit Report Companies are now being watched by the FEDs
About a couple of months ago, the Consumer Financial Protection Bureau had adopted a policy of keeping an eye on the credit report companies. In a few days’ time, the CFPB will monitor the nation’s big credit report companies and conduct examinations on site to check if they are complying with the law. This is similar to what it does already with the nation’s big banks. The federal government will play an active role in monitoring an industry that was deemed as arrogant. Till now, it was not easy to access all information necessary to create a complete picture of what is going on inside these companies. This is crucial as credit report mistakes are becoming too common. Credit report companies are now going to be required by federal law under the Fair Credit Reporting Act to correct all inaccuracies once they are highlighted by the client within a month of being informed about the issue.