Credit is an established part of American life. It can be a valuable tool permitting you to purchase a home or a car, finance an education, or take advantage of special sales and offers. Unwise use of credit, and not properly managing credit and debt however, will lead to financial problems. Knowing your legal rights and remedies is a first step to resolving those problems.
Your credit report
Your credit report is an essential element for a sound fiscal future and managing credit and debt. Employers, insurance agencies, and future creditors use the report to obtain information about you. Your credit report is such an important document that the law gives you certain protections against the reporting of incorrect information.
How to obtain a copy of your credit report:
If you were denied credit, you should obtain a copy of your report to verify that the information is correct. You have the right to know which credit reporting agency prepared the report that was used to deny you credit. Under state law, you have the right to a free copy of your credit report within sixty days of being denied credit. Laws change and there are different laws in different states, so do your homework.
You also are entitled to one free copy of your credit report per calendar year, even if you were not denied credit. Consider requesting a copy every year to ensure your report is without errors.
Correcting your credit report:
If there is incorrect information in your credit report, you may ask the credit reporting agency to investigate. The agency must investigate your claim within 30 business days by asking the creditor in question to review its records, unless the agency believes that the dispute is “frivolous or irrelevant.” The credit reporting agency must correct, complete, or delete any information that is erroneous, incomplete, or unverified.
Additionally, negative information that is more than seven years old cannot be included in your credit report. There are several exceptions to this rule; the main one is bankruptcy, which may be reported for up to ten years.
If you disagree with the results of the credit bureau’s investigation, you have the right to dispute the items and prepare a brief statement that explains your version of the dispute (To get dispute letters done for you, click HERE). The credit reporting agency will then include this statement with your credit report each time it sends out the report.
If you have credit problems and managing credit and debt
If there is legitimate negative information in your credit report, there is nothing you can do to change it. Negative information includes late payments, bankruptcy, liens, and accounts given to a collection agency.
Negative information in your files does not necessarily mean that you will be denied additional credit. Different creditors review your credit history in different ways.
There are ways, however, to get some of this negative information to be reflected as a positive remark rather than a negative one. For example, instead of a late payment, it can be changed to ‘paid as agreed’.
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To Your Great Credit,
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