Improve your credit by understanding the basics

What's in a credit report, how can you check it and how often should you review it? Make sure your credit information is accurate.  Details about your financial behavior and identification information are contained in your personal credit report. This consumer-friendly report is sometimes called a credit file or a credit history. A copy of your credit report makes it easy for you to understand the information a lender would be seeing if they review your credit history. The typical consumer credit report includes four types of information. By law, we cannot disclose certain medical information (relating to physical, mental, or behavioral health or condition). Although we do not generally collect such information, it could appear in the name of a data furnisher (i.e., "Cancer Center") that reports your payment history to us. If so, those names display in your report, but in reports to others they display only as medical payment data. Consumer statements included on your report at your request that contain medical information are disclosed to others.

Public record information in some states may also include overdue child support. Bankruptcy information can remain on your credit report up to 10 years; unpaid tax liens can remain for up to 15 years; other public record information can remain up to seven years.

Credit information includes specific account information, such as the date opened, credit limit or loan amount, balance and monthly payment and payment pattern. The report also states whether anyone besides you (a joint account holder or cosigner, for example) is responsible for paying the account. Active positive credit information may remain on your report indefinitely, while most negative information remains up to seven years.

Requests by others to view your credit history will show you who has received information from your credit report and who was given your name during the recent past, as allowed by law. According to the Fair Credit Reporting Act (FCRA), credit grantors with a permissible purpose may inquire about your credit information without your prior consent. This section includes the date of the inquiry and how long the inquiry will remain on your report.

On your personal credit report information about those who inquired for the purposes of extending a pre-approved credit offer are included for your information. These inquiries are not revealed to creditors and do not impact your ability to obtain credit.

Personal information can include your name, current and previous addresses, telephone number, reported variations of your Social Security number, date of birth and current and previous employers.

"Statements of dispute" also may be added by you or your creditors. Creditors report temporary dispute statements when you challenge an account's status with them. The statement is no longer reported when the dispute is resolved, usually within 30 days.

If you and your creditor cannot agree on an account's status, you may have a statement added to your credit history. The statement will remain for seven years. Because the Fair Credit Reporting Act requires that we add statements at the consumer's request, we cannot mask medical information contained in a statement. Statements display to anyone who reviews your information so it may not be in your best interest to share your medical information in a statement.

Your credit report does not contain data about race, religious preference, medical history, personal lifestyle, political preference, friends, criminal record or any other information unrelated to credit. Nor is there information about your checking or savings accounts.

Check your credit report

You should review your credit report annually to make sure there are no errors.  By law you are entitled to receive one free copy of your credit report from each credit agency annually.  This free credit report will not include your score.  Review your credit report before making a large credit purchase and make sure the information is accurate. If it's not, you can dispute it online.  Whenever you apply for a new credit card, loan or extension of credit, the potential lender will most likely review your credit report before making a decision. You should too! Check it several weeks or even months prior to making a large credit purchase.

Get an easy-to-read summary of your credit accounts and total debt, both existing balances and available limits. Budget and plan for the future. Assure the accuracy of the information reported about your credit. This is especially important when you're getting ready to buy an expensive item such as a car or new home.  If you haven't reviewed your credit report recently, get an immediate copy of your credit report delivered online. Order now!

Improve your credit

Create a positive credit history. Learn tips on how to set up your credit history from the beginning and the importance of paying your bills on time. Federal law allows consumers to challenge inaccuracies and correct their credit files, and credit bureaus encourage consumers to dispute incorrect data. There is no fee. If you believe there is an error on your report, dispute it online for fast resolution. We will verify your dispute with the source of the data and receive a response within 30 days. Once we receive the response, the credit bureau will send you the results of our investigation. Your credit report shows how well you managed your financial responsibilities during a certain period of time. Negative information drops off over time, but the positive information remains.

To create a positive credit history:

• Print clearly when applying for credit. Consistently use your complete name. Providing complete, accurate and consistent identification on your credit applications helps set up your credit history correctly from the beginning. It also minimizes the chance that your credit file will be incomplete or mixed with another consumer's file.
• Pay your bills on time. Most lenders look at the most recent information on a report. So if you've paid your accounts on time for the last two to three years, the lender may weigh that more heavily than a series of late payments from five years ago.
• Set up a budget, and live within it. In the age of self-help and empowerment, managing your finances should top your list.
• Review your credit report 60 to 90 days before making a major purchase (such as a home or car).
  Get immediate access to your credit report by ordering now! 

If you begin to fall behind on your payments:

• Contact your lenders. Ignoring the situation will only add to your problems. Many lenders will work with you to set up a different payment schedule or interest rate. It never hurts to ask.
• Pay your bills when they're due. If you have an overdue bill, unpaid debt, tax lien or judgment, pay it off. You may find it easier to pay one affordable consolidating loan rather than several separate accounts.
• Stop using credit until your finances are under control. Look to professionals if you need assistance or if you don't have time to develop your own plan. Quality nonprofit credit counseling organizations help consumers understand credit reports, contact creditors, manage debt and set up budgets. You might also find credit management help at your local community college or community center.
• Be an educated consumer.  Going to a credit repair clinic will not be of help to you. There is nothing any credit repair clinic can legally do for you including removing inaccurate credit information that you can't do for yourself for free, and their fees can be substantial, ranging from hundreds to thousands of dollars. The Credit Repair Organization Act is a federal law that prohibits credit repair clinics from taking a consumer's money until they have fully completed the services they promised. It also requires such firms to provide consumers with a written contract stating all the services to be provided and the terms and conditions of payment. Consumers also have three days to withdraw from the contract.