A credit report is a record of your own credit history. Creditors turn to your credit file when first deciding whether or not to release you credit.

A credit report does not contain any information on your race, religion or political preferences, but it does contain information on:

Your Own Identifiers: your legal name, present and past addresses, present and past employers and your social security number.
Current and Past Credit Accounts: this part has all your present credit accounts including credit limits, balances and payment histories.
Public Record Information: Here they record any tax liens, bankruptcies and legal judgements against you.
Credit Inquiries: Data regarding businesses that have requested your credit file within the last 12 months.

It’s vital to periodically check your credit file as more than half the credit reports contain a bunch of errors, according to the Federal Trade Commission (FTC.gov) Often, there can be errors from the credit bureaus themselves: the credit info is transmitted to the 3 major credit bureaus by tapes or written reports, and a simple typographical mistake may inadvertently add negative data to your file.

Creditor error happens when the reporting company mistakenly give the wrong information about you.

Lastly, since the major credit bureaus are competitors, they do not give data. So positive information could be reported to Equifax and Experian, but is absent from your credit file at Transunion.

For these reasons, it’s important to check your free credit report before any big purchase or at least annually to send any mistakes.

Ordering your Free Credit Report is simple. The Federal Trade and Accurate Credit Transactions Act (FACT) of 2003 allows you to obtain a free annual credit report from the 3 major credit bureaus annually at no charge.

~Increasing your credit score is something everyone tells someone with low credit to do. The next question then would be how. The most obvious answer of course is ask for your credit report and start managing your debt. We suggest that you seek information that will help you in repairing your credit. First seek out a reputable credit agency that has a proven track record and actual feedback of their client’s success. Secondly, consider using the tips and tricks from this agency or a credit counselor, but following up on that advice yourself rather than have an agency report your credit repair progress to the credit bureau.

What does FICO mean

FICO is a method of reporting your credit with a score within a range of 300-850 with 300 being below standard, 500 being poor, and 700+ being A+ credit. FICO is an abbreviation for Fair Isaac Company credited with creating this scoring method from the information in your credit report. According to myFICO.com 90% of lenders use this credit scoring system. It would be best to find out your score. This score determines what APR you will receive for a mortgage or auto loan. This means that it determines how much your monthly payments will be. For a score of 500-600 you may pay 3% or more in interest per month comparing to a neighbor buying the same item with a credit score of 700-800. This cost a person with a low score thousands more dollars a year for the same item. As if this wasn’t enough a bunch of credit card companies and other lenders to those with bad credit take full advantage of this information to charge extremely high interest rates.

How much time Does Credit Reporting Remain on Record

After seven years a good part of debts are cancelled. The adage time cures old wounds applies even to credit scores as derogatory information such as slow pays, etc., will be removed from your report after seven years. Reports relating to good credit standing are generally kept on your records. Once these damaging entries are eliminated from your report, your credit score should improve your credit repair efforts. It is important to make timely payments and watch for error reporting.

How Can I Correct Errors on my Credit Report

The best way to address mistakes after you obtain copies of your credit report from all three credit bureaus is to send a leter to each of them. Document all of the errors and put down your dispute with the report along with copies of any evidence you may have. Also contact the creditor that made the mistake and do the same. Credit repair efforts may increase your score after these corrections have been completed.

Credit report companies can play an important role in helping you with loans and credit, if you find a good one. But what exactly can they do to help you when you decide it’s time to employ their help. Here are a bunch of things you can expect from credit report companies.

Get Your Credit Report - Any credit report company worth its salt will be able to quickly and easily get your personal credit report. It’s true that, getting your credit report is free, but these guys can do it quickly since they know where and how to get yours from each of the three credit bureaus. Generally this is worth the cost in time saved.

Assess Your Credit Report - Once you have access to your credit report, you then have to begin the laborious task of reading it. Credit report companies know exactly what to look for and what it means for your credit standing. They will be able to point out the problems in your personal credit report.

Offer Steps To Improving Your Credit - Once they have taken a look at your credit report, a credit report company will be able to give a list of concrete steps that you can take to improve the problem areas of your credit history. This is usually going to be in the form of challenging dubious or errors on your credit.

Improve Your Credit - If you don’t want to do it yourself, then credit report companies can actually implement steps to improve your credit rating by challenging false or misleading claims on your credit report. These guys have huge experience at doing this and know exactly who to contact and how to contact them regarding issues on your credit report. This service can be a great time saver.

Simply put, credit report companies can save you a lot of time and hassle, and in the long run will usually be able to help you improve your credit score and gain access to more and cheaper finance.

A consumer credit report is a factual record of an individual’s credit payment history. It is provided for a purpose permitted by law: to help a credit grantor or lender quickly and objectively decide whether to grant you credit. Most of the information in consumer credit reports comes directly from the companies a person does business with, but some information also comes from public records.

Credit reporting can be helpful in extreme cases, but it is often misrepresented by collection agencies trying to sell their services. When a collection agency reports a delinquent account to a credit bureau, it does not get the business any money today. On the other hand it provides a ‘wish’ for a payment some unknown time in the future if the debtor ever has to do a financial transaction that involves a creditor that checks their consumer credit report.

The issue is that credit reporting also can create a liability for businesses because of collection agencies reporting accounts that were not valid debts. This can open the business to legal action - something no businesses needs. It has been estimated that over 41% of the information contained in consumer credit reports not accurate, and with identity theft on the rise, a business must tread lightly when considering credit reporting.

The Fair Credit Reporting Act regulates the activities of credit reporting agencies. A credit reporting agency under this law means any person or business which assembles or evaluates consumer credit information for the purpose of providing consumer credit reports to third parties.

According to consumer credit report laws, here are some items that cannot be mentioned in consumer credit reports:

A discharge or final order in Bankruptcy Court dated more than 10 years prior to the date of the consumer credit report.
Lawsuits and judgments entered more than 7 years prior to the date of the consumer credit report.

Paid tax liens which, from the date of payment, precede the report by more than 7 years.

Accounts placed for collection or charged to profit and loss by the creditor that are dated more than 7 years before the credit report.

Records of arrest, indictment, or conviction of crime that, from date of disposition, release, or parole, precede the report by more than 7 years.
Any other adverse information that precedes the report by more than 7 years.

There are three major credit bureaus: Equifax, Experian, Trans Union. Federal law specifies how long negative information can remain on a person’s credit report. This includes late payments, accounts that the credit grantor turned over to a collection agency and judgments filed against a person in court - even if later the account was paid.

Considering how valuable your credit report and your resulting credit score are to you, it never ceases to amaze me how many people believe in and rely on misconceptions, myths, and downright bunk about how credit reporting really works.

A lot of people do not realize that they have three entirely separate and distinct credit reports, one from each of the three credit reporting bureaus. Since these bureaus do not share information it means that not one of them has a real and complete picture of your credit. Even more so, chances are extremely high that your credit report with at least one (if not all) of the credit bureaus contains errors, and the only way the errors will get fixed is if you dispute them.

But let’s spend some time here talking about some very common myths about credit, credit scores, and credit reporting, and find out what the real deal is on this misconceptions.

Myth #1: Paying off a negative account on your credit report will get it removed from your report.

That account will remain on your credit report for years, because it is part and parcel of your credit history. Keep in mind, your credit history is exactly that - a history of your dealings with credit, and just because an account is closed or paid off does not dismiss the fact that it is still part of your credit history.

Myth #2: Paying off an account will have your credit score to increase significantly.

There are a huge number of factors that come into play when the credit bureaus calculate your credit score. Chief amongst those factors are: have you been paying your financial obligations on time with at least the minimum payment due. Paying off an account entirely can actually do more damage than good. Having credit in good standing, but keeping your balance less than about 32% of your credit limit is a great place to be, and you gain no additional points by paying off that account.

Myth #3: Checking your credit reports will lower your credit score.

The financially savvy consumer will check his credit report at least once a year, sometimes more often. Every time someone requests a copy of your credit report, that fact is flagged, but it is also flagged as to who requested your credit report. If it was you, then it does nothing to your credit score, as opposed to having your credit report requested by 12 different loan companies, which is almost sure to raise a red flag and lower your score.

Myth #4: Cosigning for a loan does not mean you are responsible for the account.

The reason you were requested to co-sign on a loan or an account for someone is because they themselves have insufficient credit history or have bad credit history. The act of you co-signing on it is you telling the financial institution “hey, if they default on this, I’ll take care of it”, so you do have responsibility for the loan. But it gets worse - if the person who took out the loan starts to default on it, then it is also your credit score that suffers, since again, you co-signed on it, giving you some responsibility for making sure they repay it on time.

Understand how the credit game is played. You cannot win any game if you don’t know the rules, and since credit affects a lot of different parts of your life, it is well worth your time to understand the factors and the myths about how your credit score is derived.

A clean credit report can make life much easier than would otherwise be possible with a credit report littered with negative items. A good credit history can often significantly impact your chances of getting a loan, finding employment, renting an apartment or buying a car.

Most of the time, the negative items on your credit report are a direct result of financial decisions you have made in the past. However, there are times when your credit record has negative items that should not be listed. Next you will find methods to identify these types of errors and some helpful tips that will help you get them removed.

Identifying Negative Items

The credit reporting agencies and credit bureaus that track and report your credit history are not infallible. They make mistakes. That is why most experts recommend that you request a copy of your credit reports from the main agencies. That is the only way you can identify errors and begin the process of removing negative items that should not be listed. Keeping a clean credit report requires this type of annual review of your credit reports.

Correcting Errors

You need to write a letter to the credit bureau that issued the credit report where you found an error. Include copies of any documentation that you have to prove your case. Include a copy of your report with the errors circled. This will make it easier for the agency to identify the items in dispute. In your letter, ask them to remove the error(s) from your credit report. The credit bureaus have to investigate legitimate disputes within 30 days. If the credit bureau removes the errors, ask them to send notices to anyone who has received your credit report during the past 6 months. They are required to do this, however you must ask them.

Eliminating Negative Items

If you find negative items on your credit report that are reported accurately, the only way to truly eliminate them from your credit report is to either wait until such items are dropped by a time limitation or work with a creditor to have items removed.

Your credit history can either make life easier or more difficult. It can impact your ability to buy a home loan, purchase a car, get a job, or even rent an apartment. But, through vigilantly checking your credit reports annually, you can keep track of any errors that need to be eliminated.

Maintaining a clean credit report, free from errors, can result in qualifying for loans with favorable interest rates. Over time, a clean credit history can save you thousands of dollars and offer peace of mind.