 |
A credit bureau or agency is basically a clearinghouse of
credit information for everyone in the U.S. who has a credit
history--approximately 170 million people.
Whenever you're habitually late with payments, default on
a loan, or simply apply for a loan or line of credit, it will
show up on your credit report. How does it get there? Your
creditors regularly send in their reports to credit bureaus.
The bureaus then compile the information and make it available
to other potential creditors, upon request.
So whenever you apply for an apartment lease, auto, home,
or personal loan, and in some cases a job, the powers that
be may request a copy of your credit report to judge how responsible
you are at managing debt.
Keep in mind that:
- Accurate negative information will remain on your report
for 7 years.
- A bankruptcy filing will remain on your report for 10
years.
It's very important to periodically check your credit report
to ensure it's accurate and not suffering from some latent
bill(s) you forgot to pay--maybe from a credit card you cut
up long ago but is still technically active. According to
a recent study by the U.S. Public Interest Research Group
(PIRG), 41% of credit reports contain information that is
outdated, misspelled, incomplete, or just plain wrong. It's
not unusual for someone with the same or similar name to have
their information included in your report--especially if they
live within the same zip code region.
If you discover inaccurate information on your credit report, follow these steps to resolve the situation:
- Use the tear-off sheet attached to the report to itemize
exactly what you've found wrong.
- Send it back to the credit bureau, which has 30 days to
investigate your claims.
- If the agency is unable to resolve your dispute(s) within
30 days, it will temporarily remove the items from your
report until the issues are resolved.
- If a creditor reports that the disputed information is
indeed accurate, the information will go right back into
your report.
- If you still disagree with the findings, you may submit
a statement explaining your side of the story; this statement
will accompany every copy of the report that's sent out.
- It can take anywhere from 30 days to several years to
clear up inaccurate information, so make sure you start
the process early before applying for a major loan.
|
|
How
Credit Agencies Work
