Your Credit Report Says a lot About You

THE LENDER'S EYE VIEW: YOUR CREDIT REPORT SAYS A LOT ABOUT YOU

The right information could make the difference between buying a house or car, and staying in an apartment or keeping that clunker.

Chances are, you prepared for your last promotion board by devouring the study guide, putting a blinding shine on your shoes and scrutinizing your service record to make sure it listed every school you attended and every award you won. After all, you can't afford to take chances with your career. Nor can you afford to be any less diligent with your money.

Think of applying for a car loan, a mortgage or a credit card as getting ready for a fiscal promotion. You may pay all your bills on time and have steady employment. But when was the last time you checked your "financial service record" - your credit report - for accuracy? The right information could make the difference between buying a house or car, and staying in an apartment or keeping that clunker.

Your credit report condenses your financial history into a single document that a creditor can use to see whether you are worth taking a risk on.

Your Spending Life in a Nutshell:

Three firms - Experian (formerly TRW), Equifax Inc. and Trans Union Corp. - dominate the business of credit reporting. Each has its own reporting format, but all reports contain the same basic information.

The report's identification section proves to you and your potential creditors that the report which purports to apply to you, really is yours. It includes your complete name, any nicknames, current and previous addresses spanning the last two to five years, Social Security number, year of birth, current and previous employers, and spouse's name.

The report does not mention race, religion, medical history, political leanings or any criminal record. It does however provide alot of information about you, and it's very important to ensure the accuracy of it.

The credit history section is a complete list of all the credit ever extended to you, such as department store, gasoline and bank credit cards, mortgages, car loans and student loans. The listing for each account or loan includes:

• Who is reporting the information (the creditor's name).
• Who is responsible for payments (whether the account is joint, individual or co-signed).
• When the account was opened.
• The date of the last activity (payment or charge) on the account.
• The highest amount ever charged on the account or the credit limit (the chargeable amount).
• The amount owed at the time of the report and any amounts past due.
• Any statements you've made if you've disputed a particular bill.

Two sections you don't want to see on your report are the collections section, which shows any accounts turned over to a collection department or agency for delinquency - typically defined as 120 days late - and the public records section, which gives notice of bankruptcies, liens and other information available from local, state and federal courts.

"More and more, delinquent child support payments are being reported as well," says Maxine Sweet, vice president of consumer education at the credit reporting firm Experian. Laws for reporting such delinquencies vary by state.

An inquiry section shows you who has looked at your credit report, generally in the past 24 months. You can expect to see the names there of any company from which you requested a loan, mortgage or credit card.

Potential employers have the right to see a modified version of your credit report. The version they see, called an "employment report," is similar to your credit report, but by law cannot include your marital status and year of birth.

Being denied a loan or credit can be embarrassing. But it can be doubly embarrassing to discover that the refusal is based on inaccurate information that you provided.

"People need to remember that they are the real source of information on their reports. The typical way a report is generated is that you open an account, and that information is reported to us," Sweet says.

When you fill out an application, write clearly and make sure your name, address and Social Security number are correct. If you use a middle initial or a "Junior" or "Senior," do so consistently, Sweet says.

Mistakes Mean Money:

The high-tech nature of credit reporting makes it more convenient, but it also increases the chance for errors.

For instance, the fact that credit reports are part of a database accessible from anywhere in the country - if not the world - makes it easier for military families to establish new credit when they move from base to base.

But it also creates the potential for mistaken identity. For instance, Sweet notes, "How many Main Streets are there in America? The national database increases the possibility that people with similar names and addresses might have someone else's information on their report."

In addition, creditors make mistakes. Payments may not be recorded or may be credited to the wrong account. A Social Security number or name may be entered into the database incorrectly.

It is your responsibility, as the consumer whose credit is affected, to ensure that your report is accurate.

Credit bureaus have a legal obligation to investigate your credit history again if you send them written verification of any inaccuracies. They also must correct any mistakes in your file and delete any information they cannot verify.

If you have a dispute with a creditor that can't be resolved, you can file a brief statement with the credit bureau that explains your position in the dispute. Your statement will be included in future copies of your credit report.

You also are entitled to a free copy if you are denied credit, insurance or employment based on information it contains.

Dick Dunnigan, the education director at Consumer Credit Counseling Services of Southeast Maryland in Laurel, recommends consumers review their credit reports annually for mistakes. "You should also check your report two to three months before making a major purchase so you have time to correct any errors that may be there," he says.

Another good time to review your file is when you are getting divorced or separated. In that case, make sure any joint or co-signed accounts are closed so your soon-to-be-ex-spouse's debts don't haunt you.

Mirrors On Your Money:

To review your credit, write to one of the nation's major credit reporting bureaus and request a report. Detailed instructions are available by calling these phone numbers.

Experian Credit Report Request
P.O. Box 8030
Layton, UT 84041-8030
PH. (800) 682-7654

Experian provides one free copy per year of your credit report, on request.

Trans Union Corp.
National Consumer Relations Disclosure Center
P.O. Box 390
Springfield, PA 19064-0390
PH. (888) 567-8688 or (718) 459-1800

A copy of your Trans Union report costs $8. If requesting a joint report with your spouse, include his or her Social Security number and signature, and a check for $16. Trans Union has a separate automated system for use only when ordering a free report after being denied credit. To use it, call (316) 636-6100. Or write to the address above, including a copy of the letter refusing you credit.

Equifax Inc.
P.O. Box 105873
Atlanta, GA 30348
PH. (800) 685-1111

Depending upon your state of residence, the first Equifax report you order in a year might be free, or could cost from $3 to $8, depending on your state. A phone menu provides details, as well as a toll-free number for consumers in your state if the credit report is free. If you live in a state that requires payment, you must order your report by mail.