Why do we need credit reporting?
Credit reporting is needed because it provides the information that
helps consumers make purchases, secure loans, pay for college
educations, and manage their personal finances. Credit reporting makes
it possible for stores to accept your checks, banks to offer credit and
debit cards, businesses to market products, and corporations to better
manage their operations to benefit the world's economy.
What is a credit inquiry?
An "inquiry" is a listing of the name of a credit grantor, or authorized
user who has accessed your credit file. Each inquiry is posted to the
credit file so you know who has obtained a copy of it. Credit grantors
post an inquiry before offering you a pre-approval credit card
application. These are listed as "promotional" inquiries on your credit
file because only your name and address were accessed, not your credit
history information. They are NOT sent to credit grantors or businesses
for reasons of credit reporting. They are listed for your informational
purposes only.
What is the Fair Credit Reporting
Act?
The Fair Credit Reporting Act (FCRA) is the federal law regulating
credit reporting companies like Equifax, Esperian, and Trans Union. It
has been in effect since 1971. A revised FCRA became effective October
1, 1997. This law protects consumers' rights, such as the right to
review and contest information in their credit profiles. It also
specifically defines who can access the information in a credit profile,
and how you are notified of this activity. You may obtain a copy the
FCRA from the
Federal Trade Commission.
How does divorce affect consumer
credit?
A divorce decree does not supersede the original contract with the
creditor, and does not release you from legal responsibility on any
accounts. You must contact each creditor individually and seek their
legal binding release of your obligation. Only after that release can
your credit history be updated accordingly.
Should I use one of those companies
that promise to help correct my credit?
It's your choice. However, beware of companies that promise to remove
accurate information from your credit file. Accurate information cannot
be removed from a credit file. There is nothing they can do for you that
you cannot do for yourself by contacting the credit reporting agencies
directly. Only time will heal a delinquent credit history.
What if an item on my credit profile
is correct, but I disagree with it being reported?
For those items in your credit profile which you feel deserve further
explanation (such as an account that was paid late due to the loss of
job, military call-up, or unexpected medical bills), you may send a
brief statement to the appropriate credit reporting agency. The
information will be placed on your credit profile and will be disclosed
each time your credit profile is accessed.