Consumer Credit Secrets the Loan Companies Don't Want You to Know
Written by: Carlotta Cortes
Whether you want to buy a car, furniture, home electronics or you need to pay off medical expenses, most of us need to borrow money at some point in life. The willingness of lenders to loan you the money you want depends largely on what is inside your credit file. Credit bureaus located in most cities will tell you what information is in your file and give you a copy of your credit report for a small fee. You can find credit bureaus listed in the Yellow Pages under "Credit" or "Credit Reporting Agencies."
If you previously had credit under a different name or in a different location and it is not reported in your file, request that the credit bureau includes it. If you shared accounts with a former spouse, ask the credit bureau to list these accounts under your name as well. Credit bureaus are not required to add new accounts to your file, but many will do so for a small fee. Finally, if you now share the use of a credit account with your spouse, ask the creditor to report it under both names.
When contacting your creditor or credit bureau, it will speed the process if you do so in writing and include relevant information, such as account numbers. As with all important business communications, don't forget to keep a copy of all correspondence.
The law entitles you to correct any inaccurate information that appears in your credit bureau file. If a creditor rejects your application because of negative information contained in your credit report, it must disclose the identity of that credit bureau. At your request, the credit bureau must reveal the contents of your credit file. If you act within 30 days of being denied a loan, there is no charge for this service.
Check to see whether the information in your credit report is accurate and complete. You have the right, under the Fair Credit Reporting Act, to dispute the completeness or accuracy of any information in your report. Tell the credit bureau, in writing, why you think the information is not correct. As long as your dispute is neither frivolous nor irrelevant, the credit bureau is required to re-investigate the matter. They must correct any information that is not reported accurately. Information that cannot be verified must be deleted. If you disagree with the results of the credit bureau's re-investigation, you may file a dispute statement telling your side of the story. At your request, the credit bureau will note your dispute in future credit bureau reports.
Be aware that when negative information in your report is accurate, only time can erase it. Credit bureaus are permitted by law to report bankruptcies for ten years and other negative information for seven years. There is nothing that can be done to force a credit bureau to remove accurate information from your credit file until the reporting period has expired. Don't be fooled by advertising from companies claiming they can "repair" or "clean up" a bad credit history. In most cases, these promises turn out to be nothing but advertising hype.
Unexpected unemployment or illness occasionally makes it impossible for people to pay their bills on time. If you should ever discover that you cannot make your regular payments, it is imperative to contact your creditors at once. They may be able work out a modified payment plan that reduces your payments to a more manageable level. If you have a good history of prompt payments they will be more willing to accommodate your changed circumstances. But never wait until your account is turned over to a collection agency. At that point, it is too late.
If you need assistance dealing with your personal loans, you may want to contact the Consumer Credit Counseling Service (CCCS). This is a non-profit organization with more than 850 offices located in 50 states. Their counselors can try to arrange a plan for re-payment that is workable for you and your creditors. CCCS can also help you set up a realistic budget for the future. These services are available at little or no charge. You can find a CCCS office in your area by calling 1-800-873-2227.
Often overlooked are non-profit counseling programs operated at local colleges, credit unions, military bases and housing authorities. Lists of these no-fee or low-fee counseling services are frequently available from local consumer protection offices or banks.
Remember that good credit is a fragile commodity; much easier to break than it is to repair.
About The Author
Carlotta Cortes is a personal loans advisor for Prime Loans Info, an information website dedicated to consumer credit and personal loans: www.prime-loans.info.
(c) 2005 Prime-Loans.info.
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