Ensuring Accuracy on Your Credit Report
Your credit report is a history of your credit activities such as timeliness of payments, current debt balances, length of credit history, types of credit available to you, the number of credit inquiries and any legal action taken against you for non-payment (such as bankruptcy or a lawsuit.) The credit scoring systems use all this data to generate your credit score.
Your credit report is one of the most important factors considered when determining loan qualification. An annual check on your credit report can help monitor whether the information is up-to-date and accurate. The federal Fair Credit Reporting Act (FCRA) has instituted a phase-in requirement (state-by-state, completed by September 1, 2005) that credit reporting companies must provide a free copy of your credit report once a year at http://www.annualcreditreport.com.
Monitor Each of the Major Bureaus
The FCRA, enforced by the Federal Trade Commission (FTC), is aimed at both the credit reporting agencies (CRA) and the creditors supplying the information to the CRA. The objective is to protect the consumer by ensuring privacy and accuracy of information. You can help with this goal by monitoring the credit reports from each of the three main credit reporting agencies. They work independently and may have differing information. Since you never know from which agency your lender will order your credit report, it is advisable to check all three periodically. You may access these at:
Reporting Errors on Your Credit Report
Errors on your credit report can have a negative impact on obtaining future credit including a new home loan. Consumers have a right to review their files and contest errors. The credit reporting agency has an obligation to investigate, respond and correct the discrepancies.
If you discover an error on your credit report it is important to:
- dispute the error in writing
- provide specific information (name, address and social security #, each item of dispute along with request for deletion or correction, and copies of support documents proving the error)
- keep copies of your letter of dispute and supporting documents
- transmit by certified mail, return receipt requested (to prove receipt date, as the CRA is mandated to timely investigate timely (within 30 days), notify the creditor with dispute information, review the results of the creditor investigation, and provide written results of the investigation along with a free copy of your changed report)
- submit a dispute letter on each specific item to the corresponding creditor, as the creditor, if an error is verified, must notify all CRA’s nationwide so that they can make appropriate corrections to your file (information in question, that cannot be verified, must be deleted from your file)
Contact The HOUSE Team with any questions you may have regarding how your credit may impact your ability to obtain a new home loan.
Team Phone: 602.435.2149
Team Email: Team@JeremyHouse.com