Bad Credit Boot Camp
An OppLoans Guide to Understanding Your Credit, Credit Report, and Credit Score.
|Justin Lavelle – (@Been Verified)|
“Reviewing your credit report is essential with both the increase in identity theft and the possibility of simple errors. There are three major reporting agencies: Equifax, Experian, and Trans Union. Each is required to give you a free copy of your credit report each year if you request one. At the very minimum, you should be doing this. However, it is probably in your best interest to invest in a credit monitoring program such as Life Lock to have a daily and active monitoring system of your credit and further your personal information.
Let’s focus on the minimum review that you should be doing. After requesting your credit report from each agency, you need to sit down and work through each aspect of the report. The report will include personal information, employment information, and then credit information. Make sure addresses are correct. If there is an address that is not yours, this should be reported to the agency that has it listed. This could be a signal that someone has your credit. Also, report inaccurate employment information and then move to the credit section. You want to be able to match all credit entries with the accurate information you have in your personal records. Make sure that all accounts that are closed are in fact closed. Match open accounts to accounts you currently maintain. Any account that you do not recognize, you need to inquire about and possibly open a formal inquiry.
It is important that you maintain a good recollection of your credit history and also good records to refresh that recollection if you find something odd on your report. An annual review is imperative but experts will urge that you do this more frequently than that.”
|Lucy Luzarony – LucyLazarony.com (@lucy_lazarony)|
“I’ve been using Experian’s CreditWorks, I get to track my credit score (FICO score 8 model) each month and check my credit report from Experian. It’s not free but I trust the accuracy of the score since it uses the FiCO scoring model. Another free site put me in a panic, they had my credit score much lower than I expected and that’s why I paid Experian for a check of my FICO score and felt relieved when it was higher.”
Checking your report for errors
According to the FTC, about 5 percent of all credit reports contain errors, These errors, if left unspotted, could seriously affect your ability to borrow.9 The Fair Credit Reporting Act holds credit bureaus and the companies that they collect information from accountable for correcting errors on your credit report.10 However, it’s up to you to find these errors in your report and submit a formal complaint to the credit bureaus on your own. To look for errors on your credit report, request a copy and take a hard look at the following information to make sure it’s all correct:12
- Personal information: name, address, social security number, etc.
- Account history: a list of all the accounts you’ve opened under your own name, loan or credit amount, history of payments, etc.
- Inquiries: A list of third parties that have requested your credit report in the last 24 months
- Public records: bankruptcies, legal judgments against you, foreclosures, etc.
If you find an error in your credit report, you need to write a letter to both the credit bureau and information provider correcting the information and including documentation to prove that there was an error. You can find a sample dispute letter on the next page, or click here to file a dispute online with all three major credit bureaus.
Sample Dispute Letter
123 Fake Street
City, State Zip codeComplaint Department
X Credit Bureau
123 Fake Lane
City, State, Zip CodeHello, I have spotted the following error(s) on my credit report, and am writing to correct it (/them). I have attached a copy of my credit report, and have circled all the incorrect information on the attached files. Below is a list of the error(s):
(Mention that you have attached documents supporting your position, and explain what they are and how they prove the errors on your report). I hope these errors can be deleted or corrected as soon as possible.Thank you,
| Josiah Nelson – trolysis.com |
“Many experts will tell you to get your reports from annualcreditreport.com, but with the new era of digital technology and data breaches, I believe consumers should take advantage of the many free and better alternatives. Sign up for a credit monitoring service such as CreditKarma (I’m not affiliated with them – they are just popular). Services like this are free and while the credit scores they give are notoriously unreliable, you can very easily keep track of reports and get notifications for changes to your credit reports as they happen. Consumers should be looking at their reports monthly if possible in order to keep on top of them, as simple overlooked errors can cost you thousands when applying for credit.
The best way to know if something is inaccurate is to reconcile your reports like a checkbook. If you read through your report and see an account that you don’t recognize or some of the details of a legitimate account are incorrect, the first thing to do is contact the creditor.. By law they have to list an address and phone number on the report. Simply call or write a letter stating why you believe the item is inaccurate and send it to the creditor. Often times they will rectify it on their end and that will be the end of it. If they refuse to help, send a letter to the credit bureau (addresses are easily found on Google) requesting they investigate and remove it. In 95% of cases, this will cure the error and you can move on! If not, it would be best to speak with a professional for further guidance.”
Bad Credit Boot Camp
- What is Credit and Why Does it Matter?
- Checking Your Credit Score
- How to Build Credit When You Don’t Have Any
- How to Come Back From Bad Credit
- Building and Maintaining a (Healthy!) Relationship With Credit
- About OppLoans
- About the Experts