Most credit transactions today are based on a credit score. People with high credit scores, those above 680, get preferred interest rates and repayment terms. People with low scores below 620 have problems getting financed for everyday necessities.
The difference between the scores means thousands of dollars on automobile and home loans. This numeric score even affects homeowners insurance and automobile insurance rates. The federal government realizes how important credit information is and passed a law stating that once a year every consumer is entitled to one free credit report from all three of the existing credit reporting bureaus. Every consumer should know the 3R's; request, review and report errors.
There are many ways to get a copy of your free credit report every year. The consumer can write to each of the three credit bureau reporting agencies. These bureaus are Equifax, Trans Union and Experian. It is much faster and easier to go online and request it from one of the websites that offer this service. Filling out one application at these websites will access all three reports which can be printed or read on the computer screen.
Each report should be carefully reviewed. The consumer is looking for accounts they do not recognize or even erroneous information on an account. The current and past addresses should be reviewed to make sure they are all accurate. All the accounts should be familiar.
The balances of the account should be fairly close to the current balances; closed accounts should indicate a zero balance. At the end of the report will be a list of companies that requested and received a copy of the credit report in the past two years.
Any discrepancies will be noted. A letter sent to the bureau with the wrong information will state the reason for the dispute. That bureau will then send an inquiry to the company asking for verification of the information on the report. That company has 30 days to respond; if the company does not respond in 30 days the credit bureau will remove the information from the consumer's report.
If the company responds and the credit bureau determines it is a legitimate transaction, the consumer has the right to insert his or her objection into the file and a note will be made on the report showing the disputed information.
Even small discrepancies can have a big impact on the credit score and credit terms the consumer is able to obtain. By reviewing my free credit report once a year each consumer is doing all he or she can to protect their credit information and guarantee its accuracy.