My Credit Rating Guide

We return to basics in Chapter 4, describing how you can obtain your credit report and the circumstances that currently entitle you to a free report. This chapter notes that eventually, all Americans will be entitled to one free credit report per year under the 2003 Amendments to the FCRA, known as the Fair and Accurate Credit Transactions Act (FACTA). The requirement took effect in December 2004, and was gradually being phased in under rules set by the Federal Trade Commission. debt consolidation and credit

The first two sections of the country that were entitled to free reports were the West and Midwest. Opening day for the South is June 1, 2005; the East gets theirs on September 1, 2005. Similarly, Chapter 5 explains the basics of reading and understanding your credit report, and Chapter 6 describes the fundamentals of disputing inaccuracy. Chapter 7 offers a basic overview of identity theft, often described as America s fastest growing crime, and its impact on credit report accuracy. These how-to sections serve as a starting point for those who are ready to oversee their own credit histories. check credit rating

Beyond How-To

To fully appreciate the basics, one needs to understand the larger system. To that end, Chapters 8 and 9 examine how the three major credit reporting agencies (CRAs) compile credit data on 205 million Americans, and how they and credit grantors conduct, or sometimes don t conduct, reinvestigations upon receiving consumer disputes. To help explain why credit reporting continually draws the attention of Congress, state legislators and enforcement officials, Chapter 10 traces the evolution of the industry, of the mixed files problem and other inaccuracy issues, and of identity theft. improve credit rating

Chapters 11 and 12 address the controversial subjects of credit repair and debt collection. Chapters 13-15 explore the use of credit reports and scores by automobile, homeowners and mortgage insurers. credit online rating report

Chapter 16 focuses on the heated debate over whether credit scoring is tied to racial discrimination. Chapter 17 looks at some of the special challenges faced by certain groups, including Hispanics, students and the divorced. credit score rating scale

One activity that affects most adult Americans, but is little understood, is the marketing of pre-approved credit card offers-the topic of Chapter 18. Chapter 19 covers the thorny issue of unauthorized access to credit reports, a problem that can arise in a number of settings, including car dealerships, for a number of reasons, including identity theft. bad card credit credit people

Chapter 20 explores the kinds of damages typically suffered by victims of inaccurate credit reports or identity theft, and provides a preliminary methodology for identifying and measuring those damages. free credit rating report

Chapter 21 recounts the exciting legislative debate of 2003, which resulted in major amendments to increase the FCRA s consumer protections. Despite the improvements, no one in Congress or elsewhere felt that the problems of credit report inaccuracy or identity theft would go away anytime soon. Some advocates predicted the problems would get worse before they got better. credit rating scale

Chapter 22, the only entirely new chapter in this Second Edition, explores controversial policies of credit card companies that fail to report their card holders credit limits to credit bureaus, a practice that can lower credit scores. It also examines credit card companies that practice universal default, meaning they will raise card holders interest rates if their credit scores drop too much - even if they ve never had a late payment with that particular company. bad credit rating

We d like to help you learn about yourself... - Simon Garfunkel Mrs. Robinson In this chapter, we will explain how to order copies of your credit report⁴⁶ and credit scores from the newly created Centralized Source, either by mail, by phone, or via the Internet. We will also explain how to order them directly from Equifax, Experian, Trans Union, and Fair Isaac. If you want contact information right away, go directly to page 75, and to page 85 for Fair Isaac. credit rating agency

By September of 2005, all Americans will be entitled to obtain one free copy per year of their Equifax, Experian, and Trans Union credit reports from the Centralized Source (credit scores are not included and always come with a price). The free report and the Centralized Source were mandated by Congress when it passed the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). The goal of the law is to improve credit report accuracy and fairness by encouraging Americans to review their credit reports. credit rating canada

⁴⁶

Technically, the CRAs define the report they give to you as a consumer disclosure. The version that is given to their subscribers, the credit grantors, when you apply for credit, is defined as a credit report. For simplicity and stylistic purposes, we will generally refer to consumer disclosures as credit reports. bad credit mortgage rating

To further this goal, Congress left in place all of the existing reasons that consumers were entitled to free reports (see pages 75-76). The bottom line: If you know your rights, you can regularly check your credit report throughout the year at little or no cost. This is a significant advance, considering that Equifax, Experian, Trans Union and others each charge between $89-$119 annually for ongoing credit report monitoring services. good credit rating

This chapter should help cost-conscious consumers figure out the most economical way to obtain their credit reports. For those whom cost is not an issue, this chapter should help them decide the fastest way to get the most complete picture. credit score rating chart

Author s Note:

At the time you read this book, you might not yet be entitled to your free report under Federal law. Still, anyone can go online and get their Experian report for free, but you must sign up for a 30-day trial at www.freecreditreport.com and provide a credit card number. If you fail to cancel by the 30th day, your credit card will be charged $12 a month until you do cancel. credit mortgage rating poor

The Centralized Source - Contact Information

Remember, you can order your free report from one, two or all three of the CRAs by mail, by phone or over the Internet. Here s the contact information. Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30374-5281 1-877-322-8228 www.annualcreditreport.com Once you are eligible, you can request your free report by mail, by phone or over the Internet. You can choose to order your Equifax, Experian and Trans Union reports all at once, or, you can order only one of three bureaus first, and then request a second one months later, and the third one after that. If you stagger your requests by four months, you effectively monitor your credit report three times per year. If you are not planning a major credit transaction like a mortgage, refinancing or auto purchase, then the staggered approach might be best, as it permits you to periodically monitor your credit report for signs of identity theft (see Chapter 7). good credit rating score

The Republicans had the votes in the committee. The financial industry lobbyists had blanketed the Hill. Senator Tim Johnson (D-SD) and Rep. Patrick Tiberi (R-OH) had both introduced bills that would make preemption permanent and which were silent on consumer protection.³⁷³ Everything seemed set for smooth sailing. Even Federal Reserve Board Chairman Alan Greenspan heartily endorsed keeping pre-emption of state law.³⁷⁴ poor credit rating loan

³⁷¹

Subcommittee on Financial Institutions and Consumer Credit ³⁷² Opening Statement of Chairman Spencer Bachus, The Importance of the National Credit Reporting System to Consumers and the U.S. Economy, May 8, 2003. ³⁷³ No senator agreed to co-sponsor Johnson s bill. In praising the credit card industry at a June hearing, Tiberi said his father was an immigrant who used his credit card to buy everything and received cash back at the end of the year. bank credit rating

³⁷⁴

Blackwell, Rob; Greenspan Is 1st Regulator To Endorse FCRA Extension, The American Banker; February 13, 2003. Actually, Greenspan was quite vague, stating, The system cannot function without ... the credit histories of individual borrowers, he said. I should certainly hope that it is maintained. He did not address accuracy and reliability problems, even though his own researchers had found such problems. (See Footnote 27, Chapter 10 on history) credit card for poor credit

There was one problem. At the opening hearing, Assistant Treasury Secretary Wayne Abernathy stunned many Republicans when he testified that the Bush Administration had not yet finalized its position on the FCRA. Therefore, he said, he could not even say whether the Administration supported extension of the law s preemption provision, or whether new safeguards were needed to help consumers fight against identity theft.³⁷⁵ business credit rating

What happened According to sources, political higher ups in the White House discovered through their polling data that the vast majority of Americans cared strongly about such issues as financial privacy, credit report accuracy, and identity theft. The polling data indicated it actually could be risky to endorse industry s wish for preemption without due consideration for consumers interest. In other words, the Bush Administration was still at the drawing board. It was clearly a setback for the industry s fast-track timetable. moodys credit rating

Despite the Administration s reticence, Committee Chairman Michael Oxley (R-OH) left no doubt that the committee s priority was reauthorizing preemption. While acknowledging that the committee had many issues to explore, he declared: At the end of the day, this committee will act and will pass legislation reauthorizing the FCRA. That is job No. 1. credit card with bad credit

But Rep. Bernie Sanders (I-VT), the Ranking Independent on the subcommittee, said that extensive inaccuracy in credit reports, coupled with growing identity theft, underscored the urgent need for stronger consumer protections. Sanders repeatedly said the place to start was one free credit report per year. Vermont was one of the first states to have a law requiring one free credit report per year. Throughout the House s spring and summer hearings, Sanders continued to harangue committee members about the need for a federal right to a free credit report. personal credit rating

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Sincerely, Paula Vista, CA When I came to Veracity Credit Consultants for help with my credit report I never expected the results I got. I began with a credit score of 681 and found several errors on my credit report from Experian. A few credit card accounts that were not mine, some repeated entries, and no report of limits on my cards were some of the problems I found. Veracity worked with these problems and aggressively disputed the false data on my report. canadian credit rating

Within 30 days, my score moved up to 716 and within 45 days I moved to 740. With a score of 740 I went to Volkswagen to finance a new car and was quickly offered 0% financing. With my prior score of 681, I was offered 4.9% for the same deal. credit union rating

The difference in financing saved me about $1, 500 on the car. In addition to the great offer from Volkswagen, I have also been offered many credit card deals that allow me to transfer balances at 0% for up to a year, making it much easier and efficient to manage credit card debt. Jamie Denver, CO Colorado Mortgage Press Oct 2005 - CAMB President Comments on Veracity. corporate credit rating

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Sheffey letter, op. cit. Sheffey said another theory is that credit history reflects personal responsibility and that one who prudently manages one s finances is prudent and responsible in the realms of homes and cars as well.²¹⁰ A derivation would be that financially stable people would be more likely to pay for a minimal loss themselves because they have the financial wherewithal, rather than file a claim. ²¹¹ Similarly, some insurers believe that financially stable individuals are likely to exhibit stability in many other aspects of their lives.²¹² credit how improve quickly

Sheffey said Allstate was not aware of any research that supported these theories, but was emphatic that the risk-taking and stress theories were well supported by research. Key Factors For Insurers According to the American Insurance Association, here are some of the kinds of data from credit reports that are of most interest to insurance scoring models: fico credit rating

• Payment History improving credit rating

• Bankruptcies mortgage credit rating

• Collections average credit rating

• Length Of Credit History loan for people with poor

• Amount Of Outstanding Debt bureau credit rating

• New Applications For Credit find credit rating

• Types Of Credit In Use increase credit rating

The debate over the link between credit reports and insurability promises to continue, as few consumer advocates have been persuaded by Sheffey s arguments. ²¹⁰ Insurance Information Institute, The Use of Credit Information as an Underwriting Tool in Personal Lines Insurance, Brookings Institution Presentation, February 27, 2003. credit rating uk

²¹¹

From an April 11, 2003 presentation by NAIC President and Arkansas Insurance Commissioner Mike Pickens, reported by AM Best on April 14, 2003. ²¹² Insurance Information Institute, The Use of Credit Information as an Underwriting Tool in Personal Lines Insurance, Brookings Institution Presentation, February 27, 2003. A Contrary View Birny Birnbaum executive director of the Council for Economic Justice in Austin, Texas has led the fight against insurance credit scoring. He continually has challenged industry assertions that it is fair, that there is a correlation between credit history and insurance, or that the studies supporting it were credible. free credit rating canada

The evidence supporting the correlation claim comes almost exclusively from insurers, insurer trade associations, and credit scoring vendors who refuse to divulge the methodology of their studies, details of the study results, and/or the underlying data for independent verification, Birnbaum wrote in a January 2003 report for the Ohio Civil Rights Commission.²¹³ For those studies about which some information is known, the industry claims become more suspicious. For example, Fair, Isaac and Company continues to bring out the Tillinghast study as support for the correlation-even though the National Association of Insurance Commissioners Credit Reports subgroup dismissed the study as counterproductive and misleading. standard poors credit rating

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