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
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
- 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.
- 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.
- 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
- 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,
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
Experian National Consumer Assistance Center
PO Box 2104
Allen TX 75013-2104
* Order via phone:
Information Service Center
P.O. Box 105496
Atlanta, Georgia 30348-5496
* Order via phone:
Consumer Disclosure Center
P.O. Box 1000
Chester, PA 19022
* Order via phone:
* 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
- 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?
If you're married, get a copy of (all of)
your spouse's credit reports as well.
worried about your credit report(s)
you're thinking about going to
counseling or considering bankruptcy,
READ THIS FIRST!
Do any of these sound familiar?
"I have great credit, but just too much of
"I'm on time on all of my bills...but I have
no money left over!"
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
Lots of information (no matter where you're located) can be found here.