Credit FAQ


Credit is when a consumer is able to obtain items before paying for them, based on a promise that the funds will be paid in the near future. Generally, a fee is charged by those providing the credit.

A credit report is used by grantors to make decisions based on whether or not an individual should be granted credit. It is also often recognized as a summary of your financial history.

Your credit score is a 3-digit number used by lenders to make decisions. The score predicts credit risk or the chance of an individual falling behind payments within the span of 12 to 24 months. The higher the score, the better.

Your credit score is determined by six pieces of information including:

  • Your payment history – Have you been paying your bills on time?
  • Credit owed – How much do you owe?
  • Credit utilization – Is your balance close to the credit limit?
  • Experience and time – When did you first establish your credit?
  • New accounts and inquiries – Are you searching to acquire new debt?
  • Credit Mix – Do you have a diverse mix of credit cards, student loans, auto loans and mortgages?

If the range of a score is between 300 to 850, a score above 700 is good. If your score is above 800, it is considered to be excellent. A score between 580 to 669 is fair.

Yes. The federal government allows individuals to dispute items and resolve errors on their own.

You can contact the three major credit reporting companies in the United States: Equifax, Experian, and TransUnion.

EQUIFAX

  • Online: Link
  • Phone: Phone number provided on credit report or (800) 864-2978

EXPERIAN

  • Online: Link
  • Phone: Phone number provided on credit report or (888) 397-3742

TRANSUNION

  • Online: Link
  • Phone: (800) 916-8800

Consumer reporting agencies provide credit information and risk management tools to help entities make credit decisions. These reporting agencies provide consumer credit reports to banks, credit card companies, finance companies and more. Reports generally include personal information that is often collected by credit grantors. The report provides data suggesting how customers pay bills and debt. Reporting agencies gather this information, and grantors are then able to obtain reports to make decisions.

Mail: You can request in writing to receive your report, free of charge. Remember to include two pieces of I.D. The downside to receiving your report through the mail is that your credit score may not be provided.

Online: You can also order your report online through agency websites such as Equifax, Experian, and TransUnion. If you are facing a time constraint, this method is optimal as you will receive the report immediately. Unlike ordering your report through the mail, you can request to view your credit score online. However, these credit-reporting agencies may charge a fee.

For further information, you can directly call the top credit reporting agencies:

EQUIFAX

  • Online: Link
  • Phone: Phone number provided on credit report or (800) 864-2978

EXPERIAN

  • Online: Link
  • Phone: Phone number provided on credit report or (888) 397-3742

TRANSUNION

  • Online: Link
  • Phone: (800) 916-8800

The three credit reporting companies have created a single form, website, and toll-free number from which you can order your annual report.

  • Form: Link
  • Website: Link
  • Toll-Free Number: 1-877-322-8228
  • The form can then be mailed to:
  • Annual Credit Report Request Service
  • P.O. Box 105281
  • Atlanta, GA 30348-5281

An agency will verify credit information that is disputed by you. The organization who has reported the information will be contacted in order to determine the accuracy of the report. Once your request is processed, it can take up to 30 days for the investigation to conclude. Companies who have inquired about your history are notified about the dispute, and often you will receive notice in the mail that the investigation has concluded.

If the information has been reported correctly, you generally are able to write a statement explaining the dispute.

During this process, it is recommended that you do not apply for credit.

A credit score cannot be disputed because it is generally not included in a credit report. You receive a score at a certain point in time when and inquiry has been placed. However, information changes within the report may cause your score to change. Information that may be disputed includes credit history, outstanding balances, number of accounts, age of account and other factors. Inaccurate information on the report can be investigated and clarified.

Check to ensure that the information is solely about you, and that the report does not include inaccurate or incomplete information. Some errors may include:

  • Identity Errors: Incorrect name, phone number, address, accounts under a different name or similar name, or incorrect accounts due to identity theft
  • Incorrect Reporting of Account Status: Closed accounts seen as open, authorized user is reported as owner of the account, accounts inaccurately reported late or delinquent, error in the date of the last payment, or an error regarding the date opened and the date of first delinquency
  • Data Management Errors: Incorrect information reported once again after being corrected, or accounts that appear numerous times under different creditors
  • Balance Errors: Accounts with incorrect balance or credit limit

Download sample dispute letters provided by the Consumer Financial Protection Bureau:

Link

Download sample dispute letters provided by the Consumer Financial Protection Bureau:

  • Equifax: Link
  • Mail the dispute form with your letter to:
  • Equifax Information Services LLC
  • P.O. Box 740256
  • Atlanta, GA 30348
  • Experian
  • P.O. Box 4500
  • Allen, TX 75013
  • TransUnion: Link
  • Mail the dispute form with your letter to:
  • TransUnion LLC
  • Consumer Dispute Center
  • P.O. Box 2000
  • Chester, PA 19016

  • Full name (middle initial and suffix if necessary e.g. Jr., Sr., etc)
  • Social Security Number
  • Date of Birth
  • Current address
  • Addresses of past living spaces within two year

You can submit additional documents to support your dispute such as:

  • Police reports or identity theft report
  • Proof of bankruptcy
  • Creditor letters showing which corrections should take place
  • Student loan disability letter
  • Cancelled checks
  • Court documents in regards to public records

It is recommended that you settle a dispute by directly contacting the company that provided the information.

Information remains on your account for about 7 years or until the statute of limitations runs out. A statute of limitations is the limited time period creditors or debt collectors have to file a lawsuit to claim the debt. However, bankruptcy can remain on your report for up to 10 years.

Numerous companies say they will be able to repair your credit for an upfront fee. However, negative information cannot be removed. Late payments and other information will remain on your report if it is accurate. Errors can be altered free of charge.

Immediately contact a nationwide credit reporting company to place a fraud alert on your credit report. A fraud alert ensures that creditors take steps to verify your identity before opening a new account, issuing a new card, or increasing a credit limit.

There is an initial fraud alert and an extended fraud alert.

Initial Fraud Alert: You can place this alert on your report if you believe you are or may become a victim of identity theft. The alert remains on your file for 90 days and then expires. You can then implement another fraud alert if desired.

Extended Alert: After your identity is stolen and you file an identity theft report, you can place this alert on your file. An extended alert is active for seven years and requires the creditor to contact you to verify whether or not the person making a request is you.

A security freeze prevents creditors from accessing your credit file and others from opening accounts under your name. If a security freeze is placed on your account, other credit reporting companies will not be notified. However, under an initial or extended alert, all reporting companies are notified. It is important to note that a freeze does not prevent criminals from having access to your existing accounts.

No, this will have no effect on your credit score. Viewing your credit report regularly can help ensure information is accurate and up to date. Thus, it is recommended to review your score yearly.

No, you can challenge any debt on your file without extending the amount of time that the debt can be reported. The amount of time that a debt can be reported is set by law.

During an ongoing investigation, your account cannot be reported as delinquent if you have paid the minimum amount due for the undisputed amount. The disputed amount can be reported by the card issuer.