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Managing Finances for a Better Credit Rating
In the world of finances it is all about managing debt to maximize one’s buying power. Since a consumer’s credit score has a direct correlation on any financing or loan authorization, reviewing the accuracy of a credit report is a consumer savvy. Consequently, managing one’s personal finances for a better credit rating is critical.
Did you know that when financial institutions consider authorizing loan approval, they review your payment history? Even if you were unemployed when you were inundated with medical bills, the balance will appear on the credit report.
FACT: Over thirty-five percent of American consumers impaired with a low credit score -- due to expensive hospital and medical bills.
About Your Credit Report Card
A credit report is very similar to an adult life quality report card. It details such personal information as:
Credit reports or your report card are kept by organizations referred to as consumer reporting agencies (CRAs). These credit bureaus collect, compile and sell consumers credit documents to businesses. Banks and lending institutions approve applications based on credit. Certain insurance companies and employers evaluate one’s credit before writing a policy or extending employment.
Subsequently, Americans should always review their credit score to ensure the information is accurate. Financial advisors recommend that all consumers should report any updated, omissions or inaccuracies. Specifically, for the person planning to apply for a mortgage, auto loan or other personal loans (secured or non-secured) an exact truthful credit report is important. Moreover, the Fair Credit Reporting Act (FCRA) authorizes consumers the opportunity to submit corrections.
Another aspect of managing one’s finances with a better credit score is by checking the accuracy of information detailed on the credit file. Nonetheless, it may drastically accelerate the credit-granting process.
On the other side of the spectrum, consumers who are denied credit have the right to acquire the following information:
Generally, the cost of a credit report starts at nine dollars.
Credit Reporting Agencies and Credit Bureaus
There are three major credit bureau agencies (Experian, Trans Union and Equifax). All agencies may have different information about a consumer. To compare and check all your credit files from all the top agencies, here is their address:
Experian
Trans Union
Equifax
After you obtain a copy of your credit report, the first step to managing your finances begins with noting any discrepancies. Then, protect your rights under the FCRA Act by contacting the source of the erroneous information and the credit reporting agency by writing a letter.
Sample Dispute Letter
Date
(Your Information)
Name
Address
City, State, Zip Code
Complaint/Dispute Department
Name of Credit Reporting Bureau
Address
City, State, Postal Code
To Whom It May Concern:
Attached you will find a copy of a report I received. The items of dispute are circled on the attached copy of the report I received.
1.) (Detail the disputed items in a list with the credit account, name of the creditor the type of item, such as credit account or judgment etcetera)
This above item is (inaccurate) because (detail what item is inaccurate or incomplete and why). I am requesting that the above named item be removed or corrected (or state the specific change).
Attached you will find copies (describe any enclosures that depict a record of payments or any court documents) which demonstrate my position. Please research this issue and (remove or amend) the disputed item(s) as soon as possible.
Regards,
Your name
Enclosures: (List what you are enclosing)
Remember to include duplicates (only) of the documents that corroborate the correction.
Facts about Accurate but Negative Credit Report Information
There are scenarios where negative information may be accurate. Unfortunately, there is a general period of time that the information must remain on a credit report. Usually, the time limit is seven months; however the following list details the exceptions:
In summation, despite negative accurate information, paying your bills on time and correcting any errors is a good way to manage your finances for a better credit rating.
© About-Personal-Loans.com. All rights reserved.
About The Author Holly Bentz is a finance writer and a contributor to About Personal Loans.
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