A Guide Consumer Credit Reports
There are three national credit bureaus namely, TransUnion, Experian, and Equifax that provide consumer credit reports to consumers, lenders and financial institutions. These credit bureaus have a database of credit history of a consumer. Credit history includes consumer data such as loans, and other outstanding debts. Generally, credit bureaus are notified when a consumer applies for credit, or a job, or an insurance policy.
A consumer gets a consumer score depending on how good his credit history is. Credit card companies and other lenders charge an interest rate to a consumer based on his credit score. These days, insurance companies also decide their premiums on the basis of credit scores.
The credit report may sometimes be incorrect owing to the massive amounts of credit information collected. These errors can be corrected by means of credit repair. Consumers must understand all the aspects of their credit reports for timely rectification of these errors. After nullifying the errors, the credit score automatically increases.
For credit repairs, consumers must acquire a copy of his credit report from all the 3 bureaus. The consumer must then check the report for any error or discrepancy. If at all the consumer comes across any errors, he can bring them to the notice of the credit bureaus. In turn, the credit bureaus then verifies these issues with the concerning creditors and then rectify them. In some cases, the concerned creditors do not even have the necessary records for verification. If the credit bureau is unable to investigate and resolve these discrepancies in 30 days then they are deleted or corrected.
The Fair and Accurate Credit Transactions Act (FACT Act) entitles a consumer to get a free annual credit report on request. It also includes different ways to improve the accuracy of credit reports.
It is difficult to get loans from any reputed financial institution in the absence of a good credit history. A bad credit history may also get in the way of acquiring insurance, a good job or even renting a home.