Making the Most of Consumer Credit Reports

Financial health is dependent on careful monitoring of consumer credit reports

Consumer credit reports are an important piece of information that needs careful monitoring. The report contains your credit score, which is viewed by lenders to help them determine whether to loan you (or your business) money and at what interest rate. The higher your score, the more likely you are to obtain a favorable interest rate from lenders. Therefore, it is very important to review your consumer credit report for errors that can negatively affect your credit score.

The Fair Credit Reporting Act requires consumer credit report services to provide you with your credit report once in 12 months free of charge. While consumers receive one free copy, business credit reports are not subject to this Act. If you need to obtain a business credit report, you can get a copy for a fee.

After obtaining your consumer credit reports online from Equifax, Experian and TransUnion, the next steps in making the most of consumer credit reports involve:

1. Reviewing credit reports for errors,

2. Disputing errors to the credit reporting agencies and lender(s) involved,

3. And monitoring activity on your credit report to identify identity theft.

 

Dispute errors found on your consumer credit report

Contact the providers of consumer credit reports and relevant lender(s) to file a dispute in regards to any errors you find on your credit check. When disputing an error, it is the consumer's responsibility to provide documentation to support the claim. If the item of dispute is found to be in your favor, the consumer credit reporting services are required to provide an updated credit report to you and anyone else that requested your credit report up to six months prior to when your dispute was filed.
Try: The Federal Trade Commission provides instructions and a sample dispute letter for you to reference when filing a dispute. All three credit reporting agencies, Equifax, Experian and TransUnion, have online dispute forms that consumers can complete if they prefer not to send a letter.

Enroll in a consumer credit report monitoring program

Credit report monitoring programs are an economical way to assist you in monitoring your credit reports held by all three agencies. These monitoring programs will alert you to any changes and/or report inquiries.
Try: Equifax Credit Watch Gold, TransUnion TrueCredit and Experian Triple Advantage monitor activity and provide individuals notification of any changes or activity to any one of their credit reports. To access Experian's Triple Advantage, scroll to the bottom of the page and click "Try it FREE."

Report unexplained activity on your consumer credit report immediately

Carefully monitoring your credit reports allows you identify any activity initiated by you in the form of loan or credit card applications. If new credit card accounts appear on your credit report, it may be indicative of identity theft. Alert the credit reporting agencies and your local law enforcement immediately.
Try: Review the information provided on Experian's Identity Theft Rights and TransUnion's Fraud Victim Assistance Department websites to learn what actions you can take in response to security breaches.

 

• Take advantage of financial education classes pertaining to consumer credit reports offered by your financial institution or community college. These courses will provide you a more in-depth understanding of how to use your credit report to your advantage by teaching you how your credit score is computed, what factors have a positive and negative impact on your credit score and various ways to improve your score.

Copyright © 2011 Business.com, Inc. All Rights Reserved.

---