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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.

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.

Many credit repair companies offer to aggressively remove your negative credit reports. The Federal Trade Commission (FTC) warns the public that most of these claims are far from the truth. The FTC advises the consumer to ask for your credit reports from the three credit bureaus. Know your rights under the Fair Credit Reporting Act. You are entitled to a free copy of your credit report if a company takes an action against you. If in case you are unemployed you can get a free credit report copy once a year.  A good credit solution provider will comply with all the legal aspects under the Credit Repair Law.

Reporting Agencies

The three main credit bureaus that maintain your credit reports: Equifax, Experian and TransUnion. You can order their reports through a centralized website under annualcreditreport.com.

Fair Credit Reporting Act

This law was enacted on 1970 to safeguard consumer against inaccuracies and inconsistencies made on their credit report. This law allows consumers to dispute inexact listings such as charge-offs, late payments and more. They also allow consumers to receive their credit report free of charge once a year.

Fair Credit Billing Act

Fair Credit Billing Act is also known as FCBA which requires creditors to accurately bill. It prohibits illegal charges. These are the charges that have discrepancies on their date and amount. This allows the consumer to ask for written proof of purchase for clarification purposes.

Fair Debt Collections Practices Act

This act protects ordinary consumers from unreasonable tactics or scams that collection agency might devise. They outline practical collection practices such as: The collection agency cannot issue threats in order to push you to pay. They can only get in touch with you in reasonable hours between 8 in the morning to 9 in the evening unless you permit them.

Disputes

You can make a written report to the credit reporting agency regarding the wrong claims that was submitted by the creditors under your credit report. You can dispute any discrepancies on your credit report by submitting a well documented credit report showing the disputed items. Send your request by certified mail with a return receipt so that you have a record that they have received your letter. They have 30 days to investigate on your claims before removing this in your report.

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.