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:

  • Where a consumer works
  • Where the individual resides
  • Have you ever been convicted of a crime
  • Has the individual ever been involved in a lawsuit or claim
  • How you pay your bills

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:

  1. The credit bureau's name (CRA)
  2. The CRAs address and all contact information
  3. A copy of a free report within 60 days of a denial
  4. In lieu of fraud, being on welfare or unemployment, consumers a allowed one complimentary copy of their credit report

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
P.O. Box 2002,
Allen, TX 75013
(888) EXPERIAN (397-3742)

Trans Union
P.O. Box 1000
Chester, PA 19022
(800) 916-8800

Equifax
P.O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111

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:

  1. Any information regarding criminal convictions may be reported for an unlimited time span.
  2. Any credit information provided as a response to an application for a salary position worth over $75,000 does not have a time limit.
  3. Bankruptcy information can remain on a report up to ten years or more.
  4. All credit information reported as a result of an application worth over $150,000 of credit or life insurance does not have a limit.
  5. Any unpaid judgments or lawsuits have a credit report life of seven years or more -- until the statute of limitations has expired (whichever is longer).

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.

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About Holly Bentz

Holly Bentz is a finance writer and a contributor to About Personal Loans.

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And here is another random article you might be interested in...

The Bad Side to Debt Consolidation Companies

It is hard to avoid noticing the massive growth that there have been in debt consolidation companies over the past few years. Initially, debt consolidation companies were some of the biggest advertisers on the internet and now they have more TV commercials than some of the most well-known brands. However, a number of these debt consolidation companies are being sued by numerous attorney generals, the FTC and the IRS over their supposed 'non-profit' status.

One of the worst debt consolidation companies has actually had a federal lawsuit filed against it and the FTC and five individual states have filed separate lawsuits against the company. This company declared Chapter 11 bankruptcy but the reality is that they have not gone out of business themselves, they have simply changed into so many other companies that they are most likely around in some form.

Interestingly, many companies do not call themselves 'debt consolidation companies' anymore because of the bad press that all of the legal action against this first company generated. You may hear of 'debt negotiation' companies or 'debt settlement' companies who are basically 'debt consolidation companies' who are using illegal tactics and should be avoided.

You can check out any debt consolidation companies, or any other company for that matter, with your local consumer protection agency and the Better Business Bureau in the company's location. Be aware that debt consolidation companies with a good rating may mean absolutely nothing. In fact, over 75% of the complaints received by the Better Business Bureau do not count against the company's rating if the complaint is considered resolved. The Better Business Bureau has no authority to investigate complaints against debt consolidation companies, nor resolve them.

One particular word of advice is to avoid any debt consolidation companies who have a registered address in Maryland or Florida. This is because these two states do not regulate debt consolidation companies. There are so many debt consolidation companies available that if you really feel that this is the best course of action for you then avoiding those in Maryland or Florida should be simple and will save you the worry of dealing with a disreputable organisation.

You can find a number of websites that offer a customer review section for debt consolidation companies. This is worth checking out to see if customers of any of the debt consolidation companies that you are considering signing up with have had problems dealing with them in the past.

Take a view on Bad Side to Debt Consolidation Companies here - http://www.debt-helper.info/debt-consolidation-companies-bad-side.html

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About Angela Rogers

Angela Rogers is the editor for http://www.debt-helper.info - Take a view on online debt consolidation services - http://www.debt-helper.info/online-debt-consolidation.html.