Credit scores, credit files, credit reports? What's the difference and should you care? There's so much to understand. It's a bunch of red tape at times; even this Consumer Watchdog had to consult experts at the Massachusetts Society of Certified Public Accountants to help figure it all out. Here’s some insider info you should know now to help navigate the maze and keep your credit score in tip top shape.
Since 2005 all Americans have a right (under the Fair Credit Reporting Act) to receive free copies of their credit files annually from credit reporting agencies. Once that happened, the credit reporting agencies and related companies started to push a bunch of credit-related products to consumers like: Credit scores, credit watch services, credit protection plans and more. Experts say you may just want to pull your reports straight-up and see what they say, it’s free after all. If there’s an error, it’s also doesn’t cost you to correct it.
What’s in a Credit Report?
A typical credit report usually contains several pages of detailed information about an individual’s financial past. It lists bank accounts, credit cards, revolving credit accounts, loans and other transactions. The report has details about current payments, past history of payments on current accounts and similar information about accounts that have been closed.
What’s a Credit Score?
FICO, formerly known as Fair Issac, is a company founded in 1956. Its first major product was the FICO score – a numerical summary of all the data in a person’s credit file that would give a credit manager a quick, easy way to determine if the potential customer was creditworthy. (Thanks FICO…)
Today FICO has numerous competitors in the credit score business including the major credit agencies. Each offers its own tweaks to the service, but the underlying principle remains the same: analyze the data in a credit file to give a quick, easy to understand summary.
Since There Are Now Different Credit Score Reporting Companies, Could Your Score Be Different?
Yes! Certified Public Accountant Mark Dietrich says he’s seen 30 to 40 point differences depending on who reports it!
How do I get my FREE Credit Report?
For direct, commercial-free access to credit reports online, go to AnnualCreditReport.com. You will have to provide the site with your Social Security number. AnnualCreditReport.com is the only source authorized by the Federal Trade Commission (FTC) for access to free credit reports. Make a note of that because there are MANY other websites out there trying to lure you into buying a credit report. Don’t fall for it!
You can also order it by phone: Each credit reporting agency’s system will initially direct you to its web site, but eventually, you will have the opportunity to order a free “credit file disclosure” that will be delivered by mail. You will need your Social Security number, date of birth and address to obtain the report. The three major sources from which you can request your report :
· Experian: Call 1-888-397-3742. Provide your area code and choose option 1 when the phone system starts directing your call. You will get a confirmation number at the end of the call.
· Equifax: Call 1-800-685-1111. This system takes the longest time to get to the ordering process. It will provide a confirmation number.
· TransUnion: Call 1-800-888-4213. This system makes a long sales pitch after taking your information to encourage you to sign up for credit protection. You will not receive a confirmation number from the system.
Shoot ! There’s an error! How do I correct it?
Dispute it! Under the Fair Credit Reporting Act, credit agencies are responsible for correcting inaccurate or incomplete information in your credit file. To make corrections to your file, send a “dispute letter” to the credit agency. Include copies (not originals) of the information in question and any backup documentation that you have to support your position.
The credit agency is required by the law to respond to your letter within 30 days. For more information about correcting errors visit the FTC website, search for “Building a Better Credit Report” for an excellent overview and detailed “how-to” information.
I Can’t Wait – Give Me a Credit Score Now
If you’re simply curious about how your credit file looks and want a quick overview – a credit score – you can visit www.quizzle.com. This website, launched in February 2008, uses data from Experian to provide a FICO-like credit score. The website offers credit protection and a variety of other paid services, but creating an account is free and it will not require you to provide a Social Security number. According to information from the site, the company is part of the Intuit corporate family. The site has been favorable reviews by reputable sources such as the Wall Street Journal and web searches do not reveal any complaints of abuse or fraud.
How Can You Raise Your Credit Score?
Dietrich says, “I would fight any "black mark" on my score that was incorrect. I have had several clients or relatives who were billed incorrectly for things and did not pay them, only to find subsequently when they went to obtain credit that the vendor had filed a report. Getting those negatives removed actually took complaints to the State Attorney General's Consumer Protection Division and a threat of a lawsuit against the vendor under the Federal Fair Credit Act, but it worked.”
Do you have any hints on how to raise your credit score? Did you have to fight the system? Let us know, we’d love to hear from you!