Know Your Rights

Understanding Your Credit Report

Fortunately, the majority of consumers have a clear understanding of the importance their credit has over their financial well-being.  As a consumer your knowledge of your credit report and its accuracy can mean the difference between you being approved credit at favorable interest rates or not.  The accuracy of the information contained in your report by creditors, banks, and other institutions is important because so many parties rely on the information in determining whether or not to maintain or extend you credit.

Good credit makes life easier, allowing you to qualify for loans, mortgages and insurance coverage at the lowest interest rates and can also make finding employment easier.  With the serious role your credit plays in your life as a consumer, it is important to understand how to read your credit report to ensure the accuracy of the information reported.  While most consumers would like to place blame on the companies reporting inaccurately, the reality is only you are responsible for regularly reviewing your report to ensure its accuracy.  Essentially, you need to take an active role in reviewing your report regularly to make sure no errors exist affecting your opportunity to obtain credit.   

To better understand your credit report, you need to understand where the information originates, how errors happen and how you can correct these errors.  Your credit report is a compilation of information all about you.  This information includes everything from your finances (how you pay your bills), employment history (past and present), rental and mortgage information and personal information including your social security number, phone number and address.    

The information is collected by the credit reporting agencies from the credit card companies, banks, mortgage companies, landlords and employers.  This information is then sold and used as a measure of your creditworthiness.  Imagining for a moment the enormity of information passed back and forth, errors are more than likely to occur.  Errors can also occur as a result of identity theft.  Regardless of how the errors occurred, it is your responsibility to discover them and work toward correcting them before they case you harm.          

Under the Fair Credit Reporting Act ("FCRA"), you are entitled to one free copy of your credit report annually.  You may retrieve a free copy of your credit report at annualcreditreport.  After you receive a copy of your report, review it for accuracy.  Review your personal information, your employment information and your accounts.  Make sure your payment history is accurate and your balances are up to date.  Make sure the accounts reporting in fact belong to you and not to another consumer.   

If you find information that is inaccurate, you must take steps to correct the information.  Under the FCRA, you can dispute any inaccurate information directly with the credit reporting agencies.  A written letter detailing the inaccurate information is the most thorough means of disputing and will provide you with the best results, however the credit reporting agencies do have online disputing pages for faster results. 

If you are having problems with your credit report or need assistance in understanding the information reporting about you contact SmithMarco P.C. for a free case review.

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