Credit Scores And Loan Applications
By  Search EzineArticles.com 

Keep Your History Clean - Remove A Negative Record From Your Report

It can make a difference of up to 18% in loan repayment costs.For example, on a 30-year, $150,000 fixed rate mortgage, a borrower with the best score, 760-850, will pay 5.59%, or $860 per month, while someone in the worst score range will pay 7.18%, or $1,016 per month.This can make a big different to the household budget, so it's to your advantage to keep your score as low as possible.

The 3 major bureaus, Experian, Equifax and Trans Union are similar and feature a "Credit Score", which is derived from report information submitted to them about you.

Uner the Equal Opportunity Act, a scoring system may not use characteristics such as race, sex, marital status, national origin or religion as factors, though they are allowed to use age.

Credit scores are determined by your bill-paying history, the number and type type of accounts you have, late payments, collection actions, and outstanding debt. The total number of points reflects how likely you are, statistically-speaking, to pay back a loan.

If you are denied credit, the Equal Opportunity Act forces the creditor to tell you the specific reasons your loan application was denied if you ask within 60 days. Acceptable reasons include high balances on charge cards, or bad employment history. Unacceptable reasons include vague excuses such as "You didn't meet our minimum standards". Sometimes you can be denied because of information on a report. The Fair Reporting Act requires the creditor to give you the contact information of the report agency supplying the information. The reporting agency can give you the information on your report, but only the lender can tell you why this led to your application being refused.

However your report may include inaccurate or incomplete information (credit records). Identity theft is a growing problem, and can take up to a year to resolve. Nearly 10 million people fall victim to identity theft each year, costing consumers $5 billion and businesses $48 billion, according to the Federal Trade Commission.

In this situation you have to send letters

to every one of the bureaus. Also learn your rights by familiarizing yourself with the Fair Reporting Act (FRCA).

The FCRA gives you the right to dispute inaccuracies and omissions, and it requires bureaus to investigate your complaint (generally in thirty days), send you a prompt response and correct any errors. The law as well requires the source of inaccurate information (such as a bank) to correct the record at the bureaus to which it initially provided the erroneous information.

Consumers working on their reports say many times their letters are ignored by bureaus. Consumers say even with proof a record isn't theirs, its removal from their report can take 3 or even 4 challenge letters, because the bureaus will have only corrected the facts in their own files and not updated the report.

Send your dispute letter by REGISTED MAIL. companies will respond faster if they know you can prove you filed a complaint on a certain date. Keep a record of when you sent the dispute letters and what date you should expect a response. If you have received no defense to your claim after thirty to thirty seven days, send another registered letter requesting an updated report and demanding the disputed record be deleted.

If the bureaus don't reply in the thirty days, it must be that the information they had on file was either inaccurate or unverifiable. In either case, based on data from the Fair Reporting Act, the record must be immediately deleted from your report.

A few consumers have eliminated negative marks on reports just by going through this process of disputing records many times. Since some creditors will not take the time to respond, you can sometimes win by default. Usually a bit of progress will be made with each challenge.Remember, the bureau would like you to quit bothering them because if you are not disputing the report, they can legally carry on selling it as profitable information.

To obtain your score, correct your rating, or even avoid becoming a Victim of Identity Theft visit our website at www.credit-score-now.info

Frank Vanderlugt

 
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