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When applying for a loan a person needs to have a credit report issued by a credit bureau. This credit bureau is an organization that tracks down the credit history of an individual as well as any related information connected with the person in question. In order for a government to sustain its financial needs credit bureaus are created to effectively manage credit risks. This is the reason why there is an increase in the creation of credit bureaus around the world.  Aside from the credit reports these credit bureaus have other functions. There are three major credit reporting agencies that are present in the United States these are: Equifax, Experian and TransUnion, they are tasked by the Federal Government to handle the credit records of consumers, and issue credit report to interested parties such as financial institutions.

These are a list of their functions:

• Collection and Updating of Credit Information
  Credit bureaus gather complete information regarding individual’s personal information as well as credit activities. The usual information that they gather contains the person’s identification details, his employment background, his payment records and public records information. Basically they keep a record of everything about the individual. They are also tasked to do updating in case the person has transferred to another job, or place of residence. In case the person files for bankruptcy or perform other credit related activities they keep a record of it all. There are cases when people are arrested or sued so the credit bureau has this information on their files too.
• Computation of Credit Scores
• Credit bureaus use a specialize software that tabulates the credit rating of each consumer. The credit score that it gives is very important since lenders access these files to help them decide whether to approved a consumer’s credit line or turn them down. Credit (FICO) scores range from 350 to 850. If your rating is 720 or higher the lending institution will tagged you as a trustworthy borrower. Your personal credit score is determined by your latest payment history for the past two years. TransUnion determines the credit score through a set of factors. They usually get information on how you pay your loans, how much money you owe, length of time when you opened an account, different types of credit that you use, and your available credits.
• Provide Credit Information to Financial Institutions
  For people who wants to ask for a bank loan the credit information provided by the credit bureau can help these financial institutions decide whether to grant a loan or not.
• Respond to Consumer Disputes
  The credit bureau is tasked by the Federal Government to help the consumer settle their disputes and complaints. The credit bureau is obliged to conduct an investigation in order to settle these disputes and to make the needed updates in the consumer’s credit file. It is a common fact that sometimes typographical errors can be made by either the creditor or the credit bureau. The investigation that this credit bureau makes usually takes a maximum of 30 days and the consumer should be sent a response to their dispute within this period. If the specific bureau has found validity to the person’s claim he needs to inform the other two credit bureaus in order for them to update their records.

It is wise to get a copy of these credit reports annually in order to check it for accuracy.  List down any set of items that you found that is inconsistent or misleading. Sometimes some people see this credit reports as potentially harmful but if view positively the credit reports provided by these credit bureau can help the people manage their finances better, help them not to fall into debt traps and help them improve their credit scores so that they would have more options in the future, if ever they decide to file for a loan.

Consumers must take note also that each of the three credit bureaus operate separately from the other so it is advisable to get copies( one from each) from each of them separately then make a comparison. As a consumer, under the Fair Credit Reporting Act you have your specific rights especially when you believe that you are a victim of an unfair credit report.

Credit scores are used by financial institutions as a way to predict whether you are a “high risk” customer. If your credit score is too low the creditors will see that you cannot be trusted to make on time payments.  So in essence you are considered as somebody bad for their business. Once you understand this fact it will be a lot easier to manage your credit card late payments.

When your “late payments” are infrequent, your credit score will not plummet as long as this is not done on a regular basis. If you are in the habit of making late payments on a regular basis this will cause long term damage on your credit scores. However, if you have a 90 days late payment on your record even if it is just one time, your credit score will be damage up to seven years. Being 90 days late labels you as “repeat offender” great risks for creditors.  The goal of most credit scoring models is to make a prediction if what type of offender you are. The fact that you paid late is so important in determining your credit score.

To summarize how late payments affect your credit score:

• 30 days late- As previously mention, as long as you have not done this frequently there is no cause for worry.
• 60 days late- same principle applies like when you are 30 days late. Again, if this is done often then damage to your credit score will apply.
• 90 days late- Has damaging result even if it just done once. Damage on your credit scores for 7 years as mentioned above.
• 120+ days late-Although this has no direct impact on your credit score. At this juncture, your debt will be sold to a collection agency.

If you are 90 days late, you still got an option so that your credit scores will not suffer. Review all the information in your credit reports. Check whether it is accurately reported. If you find discrepancies in your credit report then you have the right to dispute it. Your main goal would be to correct or removed the item wrongly reported. Once this is removed or corrected you will see an increase in your credit score.

There are instances when these cut-off times give the creditors an opportunity to manipulate your payments in order to increase your late fees and penalty rates. Sometimes these credit card companies set a due date that coincides with a non-business day; when you there is no way for you to process your payments. Exorbitant fees and penalties are charge to you as a result.

The Federal Reserve Board wants to resolve this unfair practice so they issued a mandate saying that lenders should disclose important facts about their customer loans (including credit cards). They require these lenders to post cut off times near the due dates on the front page of the credit card monthly statement if the deadlines fall before 5 p.m. At present, there is no requirement for notifying cardholders about these cut off times, although some lenders do provide this on the back of the monthly statement in fine print which is often not readable.

There are things that happen when you make a late payment on your credit card.

• Your creditor will charge you a late payment fee. Late fee ranges from $15 to $35.
• Your interest rate will increase. Creditors will increase your rate to the default rate which is the highest interest rate charged by a creditor as a penalty.
• The credit bureaus will be notified if you are more than 30 days late.
• Your credit score will drop.

The Federal Trade Commission has enforced law to protect consumer rights in America. This law is called the Fair Credit Reporting Act (FCRA) which was made to ensure the privacy of the individual or consumer information that is used in credit reports. A latest revision was made with regards to rights and has placed additional requirements on credit reporting agencies (CRA).

Businesses are held responsible for supplying your information to CRAs. Those that use these consumer reports have responsibilities under the law. Your rights under the Fair Credit Reporting Act are as follows:

The consumer has the right to receive his copy of the credit report from the three major credit bureaus once a year for free. The copy of your credit report must have all the information in your file at the time of your request. You have the right to know the contents of your credit report including medical information and the sources of these information as well

You have the right to know which person has requested for a copy of your credit report in the last year for standard purpose and two years for employment purposes.

If your application in a company was denied because of information that the credit bureaus may have provided, the company must provide you with the name and address of the specific credit bureau that had provided the said report.

If you think that there is a discrepancy in your credit report then you can file a dispute with the credit bureau and with the company who has was the source of the information. Both of these companies must investigate your claims.

If you are not satisfied on how the dispute was resolved you have the right to question them.

In case you find inaccurate information in the said report you can write the credit reporting agencies about the details regarding what you find as false or has inaccurate information. CRAs must need to investigate your allegations for 30 days and after that submit the result of their findings. They need to furnish you with a copy of their findings.
If the information provider finds the disputed information to be inaccurate it must notify all nationwide CRAs so that they can correct their information in your file.

A prospective employer cannot get your report without your consent. Your medical records cannot be revealed too as long as you do not consent to this. Not everyone can get a copy of your credit report only those who have a legitimate reason for asking for it may avail of a copy of your credit report. If you don’t want to be a victim of unsolicited mails then you can place a request by calling a toll free number.  After completing a request form your name will be removed from the lists for unsolicited offers permanently.

The three major credit bureaus maintain records of all of the citizens’ financial payment history. These credit bureaus determine your credit score by using FICO (Fair Isaac Corporation) scoring systems. These credit reporting bureau sells the information that they collect (consumer report) to creditors so that these creditors can be guided on whether they can offer you credit or not. The Fair Credit Reporting Act (FCRA) regulates the activities of the three credit bureaus.

These three major credit bureaus collect the information independently so your credit reports may be different from one credit bureau to another.  Lenders do often request reports from each of these agencies so that they can get your complete financial profile. You can file for a True Credit 3-in-1 Credit Report which allows you to see the all the three credit reports from these respective bureaus. What you see from this report is your creditworthiness which is the same thing that your potential lender sees.

You have no cause for worry if you have a good credit report. You may be able to obtain credits to purchase goods and services, apply for a home mortgage loan, and apply for insurance and employment. However, the same information from these credit bureaus may be used against you. Check your credit reports annually so that you will know what personal information was given to your creditors.

Hard inquiry is when the lender makes an inquiry to one or the three major credit bureaus regarding all the information of your credit history. The information that the lender gets will influence his decision if they will lend you or not. Soft inquiry is when you do your own inquiry regarding your own credit history. If there are many hard inquiries done on your behalf this negatively affects your credit score so apply for a credit loan in moderation.

The contact details of these three major credit bureaus are:

1. Equifax: 800-685-1111 (general) or 800-525-6285 (fraud); P.O. Box 740241, Atlanta, GA 30374; www.equifax.com
2. Experian: 888-397-3742 (general and fraud); PO Box 2002, Allen, TX 75013, www.experian.com.
3. TransUnion: 800-888-4213 (general) or 800-680-7289 (fraud); P.O. Box 2000, Chester, PA 19022; www.transunion.com

Let us discuss about each of these three credit bureaus:

• Equifax is the oldest credit bureau in the United States, they started 1899. They manage the credit histories of individual consumers and businesses. Equifax offers security freeze on reports which prevents inquiries from being made for a certain period of time.
• Experian began credit reporting in the United States in 1996. They collect data from lenders, telecommunications and motor vehicle departments. Experian also offers fraud protection services and they operate in more than 65 countries worldwide.
• TransUnion began in 1968 but started as parent company for a rail car leasing operation. They only begun credit reporting services in 1969 when they purchase Credit Bureau of Cook County. They begun full coverage of the United States in 1988. TransUnion acquired TrueCredit.com in 2002 which offers report monitoring, fraud and identity theft services directly to consumers. TransUnion operates in 24 countries aside from the United States.

The Fair Credit Reporting Act within the United States regulates the consumer news agencies on how they conduct their business. One of the guidelines stated in this law is that credit report companies should verify if the credit reports forwarded to them by these credit bureaus is accurate and true.

What is the Fair Credit Reporting Act (FCRA)?

This law regulates the activities of the credit bureaus. These three credit bureaus maintain records of all of the citizens’ financial payment history, complete personal identification information and public record data such as unlawful detainer action against you. The credit reporting bureaus sell the information (consumer report) to creditors so that they can be guided in whether they can offer you credit or not.

The FCRA will punish any unauthorized persons who try to obtain credit reports. They also give the same punishment for people from credit reporting bureau who sells this personal credit reports to unauthorized persons. Recent amendments were made to this Act to expand the consumer rights and placing additional requirements on CRAs. The businesses’ that supply your information to the CRA have new responsibilities under the amended law.  Some cause of delay in some States is due to the indirect handling of the major credit bureaus. The agency instead uses another company to handle their consumer relations. Since there is another party involve the delay happens. Errors can take months to clear up.

You have no cause for worry if you have a good credit report. You may be able to obtain credits to purchase goods and services, apply for a home mortgage loan, and apply for insurance and employment. However, the same information from these credit bureaus may be used against you. Check your credit reports annually so that you will know what personal information was given to your creditors.

Credit reporting bureaus can charge you a reasonable fee to obtain a copy of your credit report.  For additional reports they charge $9 per company. Receiving them can take ages, unless you enroll in a monthly credit monitoring service. If you have been denied credit because of the information that was taken from the credit reporting bureau, the creditor is obliged to furnish you with a copy of the credit reporting bureaus’ name and address.

A foreclosure is a worrisome prospect for anyone. But what is foreclosure? Foreclosure is simply the auctioning of your house and using the proceeds to recover the investment made by your home loan lender when you cannot pay for the mortgage repayments on your house. Another worst case scenario is when your property was not sold or the proceeds from the sale is not enough to cover the lender’s loan, a deficiency judgement could be used against you which affects your future since you can no longer obtain a real estate.

Before you make a final decision think things over. If the reason for your late payments is due to temporary set backs in your life such as losing a job then you may still have other options but if your debts are insourmountable then its time to decide on allowing foreclosure.

Do you know that under the Fair Credit Reporting Act you are protected against foreclosure? You are given the right to remove foreclosure from your credit report by requiring credit bureaus to investigate your complaint within 30 days. After this time the credit bureaus must give you an answer and if there are errors that are found your credit record must be corrected.

How to Remove Foreclosure from your Credit?

• Hiring a credit repair service. Credit counselors can help you with your debt problems. They can negotiate with lenders on your behalf to lower your interest rates and devise ways for you to repay your loan without going to the extent of foreclosure. What credit counselors can do for you is to assess your financial and debt situation and create a plan to help you with credit and debt problems both now and in the future.
• Some methods that credit repair services can use are debt validation, credit direct interventions and escalated dispute information request to remove your bad credit listing.
• Credit lawyers from this credit repair service can also help you know the ways of benefiting from recent court cases involving foreclosures. For an instance, a recent court case told that of the court nullifying a foreclosure because the bank was slipshod in their paperwork. The recent evolving credit laws and new case precedents may be helpful for your own case.
• Write credit repair letters.  Personally get in touch with your lender. Lenders make money by collecting on your principal and interest payments so it is in their best interest to continue doing so thus they want to avoid foreclosure as much as possible. As mentioned above if your lender becomes aware that you are having temporary financial difficulties then they can help you create a plan that will both benefit you.
• Be sure to get in touch with your lender’s “Loss Mitigation” department and inquire about lowering payments for a few months until your are financially able. This allows a suspension in your payments for a few months which is enough time for you to come up with other options such as finding a new job or a sideline job. If you have arrived in an agreement better place all details in writing especially with regards to the suspension or reduction of payment.
• Wait for 7 to 10 years for the foreclosure to drop off of the credit report automatically. If you are willing to wait this long then for the mean time what you can do is to build new and better credit records from now on.

The bad news about foreclosure that is why most people avoid it like the plague is that it can affect your credit reports for 7 to 10 years. It will place you in the black list whenever you apply for a line of credit in banks and mortgage lenders. A drop of 100 to 400 points in your credit score can be seen because of having foreclosure on your credit report.

Your credit score is the most important part of your credit report. Your credit score will either make you or break you. Creditors and lenders use your credit score as the basis to grant you a loan be it credit card loan, auto loan and home loan. It sure will be a big hassle once your almost near your goal of getting a loan and then you learn the  sad news that you don’t qualify because you don’t meet the necessary credit score needed for the loan. The smart thing to do is to review each of your yearly credit reports from each of the three major credit bureaus. Go over it line by line taking careful note if there is something in there that has a discrepancy.

According to a consumer group many credit reports are filled with inaccuracies.  Some errors have to do with omission/mistakes. They also find out that some credit files were missing an account for those who are in good standing. To top all of this they have find out that there are conflicting errors found in the credit reports from the three major credit bureaus!

If you find any discrepancies then its time to place your dispute in writing for proper documentation. Giving a reason for each disputed item is the best move the you can make. For example there is an account in your report that has nothing to do with you then label that identity theft. Attach a supporting document such as a billing statement or police report. In your review of your account profile when you come across any negative marks you have the right as a consumer to explain your point of view to the negative remark on your file.

Your letter should contain the company name, account name, amount owed, the reason for your dispute(make this as clear as possible), your personal information but only place the last four digits of your Social Security number for security reasons, any additional information that you can provide and a note that says you need to be notified after 30 days. Send the same letter to the three credit bureaus, be sure to use certified mail for documentation purpose.

The issuer of the credit account has 30 days to respond to your dispute. The credit reporting agency acts as your middleman between you and the credit issuer. The credit issuer will usually communicate with the credit agency on their findings. If there is an item that was found to be inaccurate the credit agency will remove this on your credit report and they furnished you with a new copy of your “corrected” credit report. By law the credit agencies are required to give you a copy of the updated credit report for free. If in case you do not hear from the credit agency within 30 days you can write them to know the latest status of your dispute. By making a follow up most individuals have an increase of at least 40 points in their credit score!