How many times do you think I've heard that from consumers all over the country? Millions of consumers are in the tank, at least in the eyes of the credit reporting bureaus. And what ever the credit bureaus say about you—right or wrong—is usually the gospel in the eyes of the credit granting community. Okay...so here goes my lecture one more time:

 

    1. Think you've got a great credit report, huh? Even though the credit reporting community likes to tell Congress and the media that according to their estimates, only 3/10 of 1% of all credit reports contain erroneous information, my estimates from the last 6 years of studying their systems and interacting with consumers pegs the number at more like 50%. That's right...in my opinion, one-half of all credit reports contain some form of erroneous information. So the chances of you having problems buying or leasing that new home or new car are much higher than you think!
 

    2. It's gotta be true if it's in my credit files, right? In the world of credit reporting, everyone is guilty until proven innocent. So it's absolutely crucial that the consumer follow my extremely aggressive and pro-active position in dealing with them. Especially if their information is incorrect!!
 

    3. There's no such thing as being "kinda pregnant."  So there's no such thing as being kinda right when it comes to a credit report. It's either right or wrong...even if the information on your report is "kinda right" it's wrong.

 

For instance...if you had a Visa card with a balance of $1,000 that you stopped making payments on let's say, on 1/1/90...and on 11/7/98 the credit bureau reported you with a balance of $4,500 that was "charged off" on 7/15/91. It's wrong--wrong--wrong!!! Why? Because the charge off date doesn't matter.
 

It's the date of last activity, which is the date of last charge or date of last payment. If the person stopped paying on 1/1/90 then they would have "defaulted" on the repayment on the terms of the account by (at the outside) 3/1/90 (since revolving charges normally require a payment every 30 days).
 

And knowing that the date of last payment was on 1/1/90, we also know that the debt should have dropped off the credit report by no later than 3/1/97...over a year and a half ago!
 

    4. Get smart early in the game!!! Get copies of all three of your credit bureau reports so you can see what everyone's saying (and the lending community thinks) about you.  There are three ways to get your credit reports: the free way, the s-l-o-w way, or right away.

 

You can get a free copy of your credit reports if...

1. You've been declined credit for any reason in the last sixty (60) days, you are entitled under federal law to receive a free copy of your credit report. You should have received a letter from the credit grantor telling you which credit reporting bureau gave them the information they based their decision on. The letter should contain instructions on how to order the report.
    
2. You've been denied employment based on information provided by a credit reporting bureau, you are entitled under federal law to receive a free copy of your credit report. The letter should contain instructions on how to order the report.
    
3. You live in a state that requires The Big Three to give you a free credit report each year regardless of whether or not you've been denied credit. As of August 2004, those states include: Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont.
    
4. You wait until December 1, 2004 and request your free credit report under the FACT act. The FACT Act, a revision of the Fair Credit Reporting Act, allows you to get one free copy of your credit report annually. Even better, you're supposed to be able to get your free report from all three credit reporting bureaus with a single phone call or online request. The Big Three and the Federal Trade Commission are supposed to comply with this law starting December 1, 2004.

In no particular hurry? You can always get your credit reports the old-fashioned (and s-l-o-w-e-s-t) way...
If you're simply being pro active (as I urge consumers to become when they're looking for big ticket items) plan on spending a few bucks to get copies of your reports. Check out each individual credit bureau website to find out what the current charges are for a credit report in your state. (The last time I looked, all three bureaus were charging $8-$9 per basic report in most states.) And be sure to include a copy of your driver's license (they've gotta have a positive ID) with your request letter and check/money order. You'll find a sample request letter right here...

Here are the addresses you'll need to send your letters and get the ball rolling in your favor... (Confirm mailing addresses with each credit bureau first!)

Experian National Consumer Assistance Center
PO Box 2104
Allen TX 75013-2104
* Order via phone: (888) 397-3742

Equifax Information Service Center
P.O. Box 105496
Atlanta, Georgia 30348-5496
* Order via phone: (800) 685-1111

TransUnion LLC
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
* Order via phone: (800) 888-4213

* Order via phone can sometimes drive you nuts with all of the menus they force us to wade through. A simpler choice? Get a free copy of your reports through a credit monitoring service... more information's located here

Can't wait? Get all 3 of your credit reports RIGHT NOW!
Save yourself the time, energy and brain damage and get instant online access to all 3 of your credit reports and your 3 FICO scores at myFICO.

5. No matter what, you need to stay on top of your credit information, as well as protect yourself from identity theft.  I highly-recommend you kill two birds with one stone and subscribe to a credit monitoring service.  You'll not only get copies of your credit reports, but they'll also notify you when ever anyone looks at your credit reports--a huge advantage for consumers trying to protect themselves from the bad guys? 

 

Dover's No-Brainer Choice? myFICO...read more about them by clicking here.

Should you consider credit counseling/debt negotiation or bankruptcy? I'm not a fan of credit counseling; check out the extensive number of articles on the topic posted/archived on my website...or read my entire chapter about CCCS and other credit counselors from my the new edition of my book Back Off! The Definitive Guide To Stopping Collection Agency Harassment (released in 2003).

If you're thinking about taking a bankruptcy, then do it right and flush everybody you can and start over: According to my research over the years, this means taking a Chapter 7 bankruptcy. If you live in Texas or Florida, thank God you chose the two best states in the Union to have financial problems.  The debtor protection laws in these states are very kind to consumers with financial problems, and with a little bit of [very legal, so don't get scared!] pre-planning, consumers can emerge from bankruptcy in solid financial shape.  Lots of information (no matter where you're located) can be found here.

My mission is not to make moral or ethical judgments, but to educate you about the ways of the world when it comes to financial survival. How you "got here" isn't important: What really is important is helping you get out of your mess legally and with dignity...and get you poised to get on with your life, a decision that's eluded many honest and honorable consumers over the years--sometimes with tragic endings.