Credit Score

Credit reports contain a wealth of valuable, confidential information about you. Your Social Security number, date of birth, current and previous addresses, telephone number (including unlisted numbers), credit payment status, employment, even legal information are contained within the pages of your credit reports.The most important step you can take to ensure accuracy of information and to safeguard your privacy is ordering your credit report once a year and knowing your credit reporting rights. The federal Fair Credit Reporting Act (FCRA) and various state laws restrict who has access to your sensitive credit information and what uses can be made of it. These federal and state laws also set the standards for the operation of consumer reporting agencies, called “CRAs” or “credit bureaus.”

There are three main credit bureaus: Equifax, Experian and TransUnion. You will sometimes read about a fourth CRA, Innovis Data Solutions (www.innovis.com). But for now at least, it is not a major player, and this guide focuses solely on the “big three.”

Experian

888-397-3742
www.Experian.com

Equifax

800-685-1111
www.Equifax.com

Trans Union

800-888-4213
www.Transunion.com

To summarize your credit reporting rights, you have the right to:

1. Obtain a copy of your free, annual credit report.
2. Know who else has received a copy of your report.
3. Dispute negative information.
4. Explain circumstances regarding accurate but negative information.
5. “Opt-out” to prevent credit bureaus from using your information for marketing.
6. File a lawsuit to enforce your rights.

Credit Reporting Agency deny credit applications?

CRAs do not make decisions regarding a consumer’s creditworthiness. Rather, the CRA compiles reports of what your file contains and passes that along to the potential credit grantor. Credit decisions are, in fact, generally made based upon a number of factors that comprise a “score.” Inquiries made in connection with your applications for credit may also be a factor in your score. If, for example, you have applied for several credit cards or loans in a short period of time, this may result in a lower score. Inquiries made in connection with pre-approved credit offers or those you make yourself do not result in
a reduced score.

How do credit scores affect my application?

The practice of credit scoring is widespread and growing. Until recent years, consumers have seldom gained access to their credit score and have not been able to learn the factors that went into the scoring process. But a 2000 law in California gave mortgage applicants a right to see their credit score (California Civil Code 1785.10, 1785.15-1780.20). Since then, the credit industry voluntarily loosened its grip on the credit score. Further, the recent FACTA amendments to the FCRA give you new rights to know your credit score as well as an explanation of the factors that determined the score.

In March 2006 the three national credit bureaus announced a joint scoring model called the VantageScore which sets a scoring range different than the FICO score. Is there anything that cannot be in my credit report? How long can information be reported?

Certain pieces of personal information cannot be in your credit report:

1. Medical information (unless you give your consent).
2. Notice of Bankruptcy (Chapter 11) more then 10 years old.
3. Debts (including delinquent child support payments) that are more than seven years old.
4. For California residents, records of arrest, information, or misdemeanor complaints must be removed
after seven years. But under federal law, records of criminal convictions may remain on a credit report
indefinitely.
5. Age, marital status, or race (if the request is from a current or prospective employer).

Certain kinds of information may remain on your report indefinitely. If, for example, you are applying for credit, insurance or employment above the dollar limits noted below, information can be reported beyond the usual seven- to 10-year deadlines.

1. A credit transaction involving, or which may be expected to involve, an amount of $150,000 or more.
2. Information about a job with a salary of more than $75,000.
3. An application for credit or life insurance for more than $150,000.
4. Tax liens that are not paid.