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Credit Repair


Credit Reports

Frequently Asked Questions


What Is A Credit Score?

A credit score is a number that reflects your risk level, as an individual, to a lender.  The higher the number, the lower the risk will be to the lender.  As you apply for increased credit or attempt to make a purchase, the lender will check your ability to pay back that loan.  The more negative marks you have on your credit report, the less likely you will be granted the loan you requested.

How Often Can Individual Credit Scores Change?

Credit scores are not fixed;  instead, they reflect a consumer’s current credit situation, based on the information in the credit report at the time the report is pulled.

What Is A Credit Report And What Is It Used For?

A credit report is a summary of your use of credit and other personal information which gives lenders a snapshot of your credit history.  Whether you are applying for a credit card, a car loan, a personal loan or a mortgage, lenders want to determine your credit risk level.  In short, lenders want to know if they can rely on you to pay them back on time.

There are three major credit reporting agencies: Experian, TransUnion and Equifax.  These agencies collect data and maintain records on millions of Americans and their bill payment histories.  The reports tell lenders how much credit you've used, what types of credit you've used, how long you've had various accounts, and whether you pay your bills on time.  Every year, millions of lending decisions are based upon the information in those reports.

Your credit report and score strongly influence how much credit will be available to you and the terms you are offered by lenders.  The speed you are approved for credit, the interest rates you get and decisions about the amount of credit are all determined by the information found in your credit report.


What’s In Your Credit Report?

Although each credit reporting agency formats and reports this information differently, all credit reports contain basically the same categories of information:

        Identifying Information.  Your name, address, Social Security number, date of birth and
        employment information are used to identify you.  These factors are not used  in credit scoring.
        Updates to this information come from information you supply to lenders.


        Trade Lines.  These are your credit accounts.  Lenders report on each account you have         
        established with them.  They report the type of account (bank card, auto loan, mortgage, etc.), the
        date you opened the account, your credit limit or loan amount, the account balance and your      
        payment history.


        Credit Inquiries.  When you apply for a loan, you authorize your lender to ask for a copy of your
        credit report.  This is how inquiries appear on your credit report.  The inquiries section contains a list
        of everyone who accessed your credit report within the last two years.  The report you see lists both
        "voluntary" inquiries, initiated by your own requests for credit, and "involuntary" inquiries, such as
        when your current creditors view your report so as to alert them of new issues which might affect your 
        ability to pay.


        Public Record and Collection Items.  Credit reporting agencies also collect public record
        information from state and county courts, and information on overdue debt from collection agencies.
        Public record information includes bankruptcies, foreclosures, lawsuits, wage attachments, liens and
        judgments.


How Is My Credit Score Calculated?

The formula used to calculate your FICO score includes information based on several factors:

       35% on your payment history
       30% on the amount you currently owe lenders
       15% on the length of your credit history
       10% on the number of new credit accounts you've opened or applied for (fewer is better)
       10% on the mix of credit accounts you have (mortgages, credit cards, installment loans,
       etc.)


Are "Credit Bureaus" Government Agencies?

No.  Credit reporting companies are just that: companies.  They are in business to make money, and they generate their income by providing consumers' credit data to creditors via subscriptions.

How Long Do Negative Items Stay On a Credit Report?

Negative credit accounts, or trade lines, can remain on your credit report for up to 7 years, and bankruptcies for up to 10 years.  Inquiries on your credit report may remain for 2 years. These are the maximum times permitted by federal law;  however, these times are not mandatory.

Why Do Credit Bureaus Have Separate Reports For Husband And Wife?

The credit bureaus collect information based on individual Social Security numbers.

Do All Three Credit Bureaus Report The Same Information?

Depending on which lender you go through, and the type of product, will determine which credit bureau the account will appear on.  Also, it could be on one, two or all three bureaus.

Who Has "Permissible Purpose" To Access My Credit File?

According to the Fair Credit Reporting Act, a credit reporting company may only disclose your credit report if someone is:

          Granting credit, reviewing your account, or collecting on your account
           Reviewing you for employment purposes
          Reviewing your application for insurance
        
  Reviewing your eligibility for a license or government-related benefits
        
   Providing information for a business transaction, such as renting an apartment
        
   Has a court order
        
  Has an IRS subpoena
        
  Someone to whom you have given written permission

How Do Mistakes Get On My Credit Report?

It is estimated that as many as 80% of credit files have errors of some kind.  Very often the information is incomplete, not updated, or corresponds to someone else.  Typical examples are:

          You applied for credit under different names (for example, Margaret Jones versus Margaret Jones-
             Smith)
           Someone made a clerical error in reading or entering name or address information from a hand-
             written application
          You gave an inaccurate Social Security number or the number was misread by the lender
          Loan or credit card information was inadvertently applied to the wrong account


Who Can Remove Items From My Credit Report?

Only the credit bureaus have the power to remove items from your credit report.  As required by law, the credit bureaus must delete inaccurate, unverifiable, or outdated information.

Is Credit Repair Legal?

Absolutely.  The Fair Credit Reporting Act allows anyone to dispute inaccurate items on their credit reports.  There's nothing we do that you cannot do yourself when it comes to fixing your credit situation.  Individuals can restore their credit on their own;  truly, the process can take time and requires some patience and knowledge when it comes to credit laws.  If you decide to use our services, we have the experience and knowledge to get you positive results.

Is There Anything That Cannot Be Removed From A Credit Report?

No.  All information reported by the credit bureaus is subject to the same laws and criteria. We may challenge on your behalf any items you request and the credit bureaus must investigate these items.
 

 


FREE CREDIT ANALYSIS

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