Consumers move throughout life without understanding what type of impact their credit reports can have on their financial well-being. What type of impact their credit reports can have on their financial well-being. The information in your credit report can allow you to enjoy some of the finest things in life, or it can make your life a struggle.
What is a credit report and why is it important? Your credit report is a snapshot of your payment history for all credit transactions that you have from age 18 until now. It details when you applied for credit, how many positive and negative accounts you have, who viewed your credit report, and all your personal information. Reviewing your credit report every four to six months gives you a chance to check for identity theft, inaccurate accounts, and incorrect information. It allows you to manage your financial situation before applying for a credit card, auto loan, bank loan, mortgage loan, employment, or insurance.
How does bad information get on my credit report? Every month, the creditors and collection agencies that you have accounts with will report positive and negative information to the credit bureaus through a computer tape monitoring system that is updated regularly. the credit bureaus then turn around and update the information. A third-party company normally passes public record information (judgements/tax liens) on to the credit bureaus.
When does negative information come off my credit report? Each negative item has a federal statute of limitation on when it must drop off your credit report. Once the statute of limitation has expired, the item must be deleted from your credit report according to the Fair Credit Reporting Act. The statue of limitation starts 180 days from the date the account became delinquent.
Federal Statute of Limitations The statute starts 180 days from the date the account became delinquent.
Who uses the information in my credit report? Banks, creditors, car dealers, mortgage brokers, and any other lending institution use your credit report to determine if you are credit-worthy of a loan. Collection agencies use the information in your credit report to track your location and see what other debts you owe. Insurance companies run your credit report to determine your insurance risk, and employment agencies view your report for employment considerations.
- Mark Clayborne