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What is a Credit Bureau

“What is a Credit Bureau? Most of us are still wondering what it does and why it’s important. Let this article help. Read more now!”

Credit Bureau Definition

Credit Bureau

A credit bureau is an organization that tracks the credit histories and related information of individuals. Whenever someone applies for credit, housing, employment, or anything else that their credit history could have an impact on, their potential creditor, landlord, or employer can check the information on file. If the bureau shows less-than-satisfactory information in its report on the person, it may affect the person’s chances of receiving the credit, lease, or job. A poor credit report can also result in higher interest rates on a loan or credit card.

There are three major US credit reporting agencies: Equifax, Experian, and TransUnion. Although the three companies share information, each maintains its own report and credit score on each individual. When someone applies for a line of credit, housing, or employment, the creditor or employer may look at the report and score from all three. For this reason, if an individual is monitoring his or her credit report for fraud or false information, it is a good idea to request a copy of the report from each agency.

A credit bureau gets the information for their reports from the individuals’ creditors. For example, if someone has a line of credit with his bank, that bank will report information regularly to the credit agency — good or bad. If the individual is always on time with payments, that fact will show on the credit report; however, if the individual has been more than 30 days late on one or more payments, the report is sure to reveal that, as well.

A variety of information gets reported to each agency. They all have personal information for each person who has gotten credit or opened a bank account on file, including their name, date of birth, Social Security number, current and previous addresses, and employment history. All of this information is collected by tracking people via creditor reports and Social Security numbers.

Account information is listed on the report, including the business handling the account, the date the account was opened, the credit line limit, the current balance, and the payment history. Even if an individual closes an account or the account becomes inactive, the report will still show this information for seven to 11 years. The accounts that each bureau includes on a credit report can be anything that is credit related, such as checking and savings accounts, credit cards, loans, and leases.

Each agency also reports any inquiries made into a person’s credit report. The report will show the type of inquiry and who made it. If too many inquiries are made within a certain period of time, the person’s credit rating can be negatively affected.

A credit bureau also includes public records on an individual’s credit report, if they are deemed related to a person’s credit worthiness. For example, if a person has declared bankruptcy, he or she will not be considered reliable, and companies may be hesitant to give him or her a line of credit. Bankruptcies are included on credit reports as a result. Even unpaid child support is considered to pertain to an individual’s dependability. This sort of information typically remains on a credit report for seven years. More at What is a Credit Bureau?

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How to Dispute Credit Report

“Credit reporting errors can have an impact on your credit score and financial future.  These tips will help you on how to dispute credit report. Read them now!”

How to Dispute a Credit Report

When you get your credit report, you may find information on it that is not correct. When that happens, you’ll need to understand how to dispute an error on your credit report. Here, we will explain how mistakes wind up on credit reports and how to fix them.

Three major credit reporting agencies; Equifax, Experian and TransUnion, maintain credit information about consumers. These companies are competitors and they each collect and maintain their own individual reports about consumers. In other words, they don’t share information with each other. The data they collect is compiled into credit reports, also referred to as “credit files” or “credit histories.”

Your credit report is a record of how you’ve managed credit accounts, including credit cards, auto loans, mortgages, and personal loans. Some types of accounts – such as medical debt or utility accounts – are not usually reported unless those bills go to collections.

How do mistakes happen?
The details on your credit report has been supplied by creditors, and gathered from public record sources, such as the court system in the case of bankruptcies or judgments. If a creditor or other source that gathers this information makes a mistake (typing in an address wrong or Social Security number, for example), that error may wind up on your credit reports.

Also keep in mind that credit reports are only compiled when they are requested. When you or a creditor requests your credit report or credit score. To do that, the credit reporting agencies will try to “match” account information they have in their databases to the consumer for which the report has been ordered. Usually that process works fine, but sometimes information about relatives or other consumers with similar names can get mixed up with yours.

Finally, if you have been inconsistent in the information you’ve used when filling out applications (using different variations of your name or address, for example), that can show up as an error on your reports.

How do you correct mistakes on your credit report?
The first step in disputing a credit report mistake is to understand whether an item is wrong or not. That sounds logical but it can be trickier than you realize. For example, your credit report may list an inquiry from a company you don’t recognize, but if that company accessed your credit report, the credit reporting agency is legally obligated to report that inquiry. Or your report may show a collection account that you paid off. While you may think it should be removed because you paid it, under federal law it can be reported for up to seven years and six months from the date you fell behind with the original creditor, regardless of whether it has been paid. (Of course, a paid collection account should still be listed as paid.)

Once you have established that an item is wrong, you can dispute it. You can contact the lender (or collection agency) who is reporting the wrong information, the credit reporting agency that lists the mistake, or both. Asking the creditor to fix it may be the simplest approach, because if they do agree they made a mistake, they will be required to transmit the correction to all the agencies to which they report. That saves you the extra step of having to dispute it with other agencies that may be reporting the same incorrect information.

However, it’s also important to note that to protect your legal rights under federal law, you must send a written copy of your dispute to the credit reporting agencies, not just the creditor. Therefore, if you find a serious mistake or if you are having trouble getting an item corrected, make sure you also report the error directly to the credit bureau(s).

Online or By Mail?
If you ordered your reports online you will have the option of disputing it online or by mail.

Online disputes are fast and convenient; however, you may not be able to include documentation to back up your side of the story. So if you have proof that an item is wrong, you may want to send a written dispute and include the records you would like to them to review. If you do file a credit report dispute by mail, be sure to send it via certified mail and keep a copy for your records. More at How to Dispute Credit Report

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How to Raise Your Credit Score

 “Having problems on how to raise your credit score? These tips will surely help. Check them out now!”

Tips on How to Raise Your Credit Score

If you’re like most people, the recession took a toll on your finances and probably your credit score. So how do you get it back to where it needs to be? While it usually takes seven years for any negatives marks to be removed from your credit report, there are a couple quick and simple ways to you can raise your credit score now. Here are a couple to keep in mind.

1. Keep paying things on time: The most important thing to remember is to keep your credit report clean from here on out. Pay your bills on time. Make sure you aren’t over your limit on any of your credit cards. Keep the balances on your credit cards low. Keeping your finances clean is the best way to raise your score.

2. Don’t cancel any of your credit cards: This may seem counterintuitive, but canceling credit cards actually lowers your credit score. Part of your credit score is based on how much credit you utilize (your credit utilization score), so the more credit you have available, the higher your credit score. If you cancel a credit card, you no longer have that credit available, which lowers your credit utilization score, which in turn lowers your credit score. Even if you’ve paid off a credit card, keep it open and gather up the extra points you get from having that extra line of credit. If you qualify, you can also apply for a new credit card to raise your credit utilization ratio, although don’t apply for more than one. Applying for too much credit at once can lower your score. Here is a good list of the best rewards credit cards that can help you save money and raise your credit score.

3. Open the lines of communication with your credit card lenders: If a bunch of credit card debt is keeping your credit score down, talk with your credit card lenders to see if you can strike a deal to pay off that debt. Many lenders are open to making deals with you, since all they are really after is the money you owe. Just remember, if you do make a deal with a lender, ask them how they will be reporting it to the credit bureaus. They have two options: “Paying as agreed,” which won’t hurt your credit score, or “Not paying as agreed,” which could bring your credit score down. Make sure they are reporting it as “paying as agreed” before you agree to any deal.

4. Sign up for a secured credit card: If your credit is so bad that you keep getting denied for a credit card or loan, try signing up for a secured credit card. Traditionally, you put down a “deposit” for a secured credit card that ends up being your credit limit, so it doesn’t matter how bad your credit is, secured credit cards are available for everyone. Just make sure to apply for a card that reports to all three credit bureaus, otherwise having the extra line of credit won’t affect your credit score.

5. Make sure there are no mistakes on your credit report: Over 42 million people in this country have errors on their credit report, and 10 million of those have errors that affect their credit score. Make sure you are regularly checking your credit report to make sure there are no mistakes and that you haven’t been a victim of identity theft. Fixing simple mistakes on your credit report can be a quick way to boost your score. Each of the different credit bureau has instructions on their web sites on how to fix an error, or you can hire a credit repair service to do the work for you (as well as try other methods to raise your credit score.) More at Simple Ways to Raise Your Credit Score

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