What a credit report is and how to correct or improve it. Presented by CLAROBuffalo and the Western NY Law Center

1. Your Credit Report
What a credit report is and how to
correct or improve it

2. What is a
Credit
Report?
There are three major
credit reporting
agencies
A credit report is a
record of your
borrowing history.
It shows what you
borrowed and how
you repaid it.

3. Name & Address
Recent Employers
Creditors who have ordered your credit report
It’s all
about
you!
 Your identifying
information
Bankruptcies
Foreclosures
Payment History on credit accounts
Birth date & Social Security Number
Court judgments
 Payment history
of debt/credit
cards
 A list of recent
requests of your
credit history
 Public records
about your debts

4. You’ll See:
 A Full List of
Your Creditors
 Payment
History
 Public Records
It’s All
There!
Whenever you apply
for a loan or credit,
the lender gives
information about
your account to the
credit reporting
agencies.
Credit reporting
agencies use this
information as the
basis of your credit
report.

5. Rent, utilities and
other non-credit
accounts will only
show up on your
credit report if you
were delinquent
and the bill went to
collections.
Don’t
Worry…
Credit reports don’t
show:
 Medical conditions
 Non-credit accounts
 Comments from
creditors
 Criminal Records

6. 7
Most negative information stays
on the report for seven years
Court judgments that have been
paid can stay for seven years
Some student loan
information can stay on
the report for more than
seven years
10
Bankruptcy can stay on
your report for ten years
Up to 20!
Court judgments that have not been
satisfied can stay on your report for up to
twenty years
How Long?
Most negative
information can
stay on your
credit report for
seven years, but
there are
exceptions.

7. What is
It?
 A number between 300
and 850
 Higher is better
 Compares you to other
people like yourself
A numeric rating
showing how
likely you are to
repay a loan.
 There are many
different scoring
formulas
 The most common
scoring formula is
“FICO”*
* Fair Isaac and Company

8. Your FICO Score
Recent Inquiries = 10%
Types of Credit = 10%
Payment History = 35%
Length of History = 15%
Outstanding Debt = 30%
Payment History
Outstanding Debt
Length of History

9. Not Reported
Your FICO score cannot be influenced by
any of the following factors:
 Race, religion, sex or marital status
 prohibited by Federal law
Age
Employment information
Child/Family support payments
Self inquiries, employer inquiries or lenders making
“promotional” offers or reviewing your current accounts

10. Other Influences
Many lenders use their own credit
scoring formula that may take
many other factors into account.





Age
Education Level
Income
Home owner vs. renter
Other factors

11. Who would want to see it?
 Employers
 must ask for your permission
first
 Landlords
 Lenders
 Insurance companies
 Government agencies
 for child support collection
 public assistance eligibility (to
check for hidden assets)
Any
Protection?
There are laws
about who can see
your credit report
and what is
required in order
for them to see it.

12. It is against the law for
creditors to base their
credit decisions on your
sex, age, race, color
religion, natural
origin, marital
status, receipt of public
income or assistance, or
the exercising of your
rights under the credit
laws.
You Have
Rights…
There are laws with regard
to how creditors can make
their lending decisions.
The Fair Credit Reporting
Act (FCRA) is the US
Federal Law that regulates
the collection and
distribution of consumer
credit information.

13. Denial
If you are denied credit, the
Equal Credit Opportunity
Act requires that the
creditor give you a notice
that tells you the specific
reasons your application
was rejected, or the fact
that you have the right to
learn the reasons if you
ask within 60 days.
You have rights under
the Equal Credit
Opportunity Act that
can help you take action
if you are denied credit.
A lender who denies
you based on
discrimination can be
fined.
A lender must tell you
why you have been
denied.

14. Sometimes you can be denied
credit because of information
from a credit report. If so, the
Fair Credit Reporting Act
requires the creditor to give you
the name, address and phone
number of the credit reporting
agency that supplied the
information. You should
contact that agency to find out
what your report said. This
information is free if you
request it within 60 days of
being turned down for credit.
Who did it?
You should find
out why you were
denied.
You should find
out who the bad
information came
from.
You should do this
within 60 days.

15. Ordering a Credit Report
You can order your credit report and score three
different ways:
Phone: 877.322.8828
On-line:
www.annualcreditreport.com
US Mail:
Annual Credit Report Request Service
PO Box 105281
Atlanta, GA 30348-5281
Complete the “Annual
Credit Report
Request” form and
mail it.
You can print the form
at www.ftc.gov/credit

16. Credit Score?
 Your free credit report will not contain
your credit score
 You can purchase your credit score
when you order your free report
 it only costs a few dollars to order the
credit score.

17. Requirements
You will need to provide information in
order to get your report:
 Name
 Address
 Social Security Number
 Date of Birth
 Identity Verification

name of your credit card company, or

something that only you would know

18.  If you request the
report on-line, it
should be
generated
immediately
 If you request the
report by mail, it
should be mailed
to you within 15
days
Immediately
or…
15 Days or
Less

19. Additional credit reports can be
ordered directly from any one of
the top 3 reporting agencies:
How Often?
1-888-EXPERIAN (397-3742)
www.experian.com
Experian National Consumer Assistance
Center
PO Box 2002
Allen, TX 75013-2104
1-800-685-1111
www.equifax.com
Equifax Customer Information Service
Center
PO Box 740241
Atlanta, GA 30374-0241
1-800-916-8800
www.transunion.com
TransUnion Corporation
PO Box 390
Springfield, PA 19064-0390
These agencies charge about $9
for the report and a few dollars
more for the credit score.
You can only get
one free credit
report a year.
Additional reports
can be ordered.

20. Other Ways
You can get a free credit report if you have been
denied credit in the past 60 days.
Other Reasons
You can also get one free report each year if:



you are unemployed and will be applying for a
job within the next 60 days
you receive public assistance
you have reason to believe that your report
contains inaccurate information due to fraud

21. Mistakes
You should check your report for incorrect and old
information
 more than 3 out of 4 people have some mistake
on their report
 Look for incorrect late payments or charge-offs
 check for personal information that does not
belong to you (name, address, birth date, social
security number, etc.)
Check for old/outdated information which should no
longer be on the report
 negative information older than 7 years
 bankruptcy information older than 10 years

22. Mistake?
Contact the Creditor!
1. Contact the creditor that reported the
incorrect information
2. Ask the creditor to report its mistake
to the credit reporting agency
3. Make sure the agency removes the
entry from your report

23. Send a
Letter
Your Name
Your Street Address
City, State, Zip
Date
Certificate of Mailing
RE: Your account number
Fill in this
information
Dear (Credit Card Company)
I am writing to dispute an incorrect charge on my
statement of [fill in date]. The charge I dispute is
also circled on the attached copy of my statement.
I dispute this charge because [give reason]
I have attached the following evidence in support
of my dispute.
Please investigate this dispute and provide me with
a written statement of outcome. Thank you.
Sincerely,
[Your Name]
 Send the Letter
Certified Mail
 Save the proof of
delivery
 To find the mailing
address, call your
credit card company
or check the “Billing
Rights Summary” on
your statement.
 Attach supporting
evidence (copies, not
originals!)

24.  The creditor is required
by law to investigate
your dispute within 30
days and notify you
with the results
 If they cannot verify the
disputed item within
this time, they must
delete the information
from your report
30
Days
Your dispute
must be
investigated
within 30 Days!

25. Follow Up!
 Make sure the information comes off
your report -- and stays off it too
 There are three credit reporting
agencies – check them all
 Check in another six months to make
sure the information doesn’t reappear

26. You can take steps that
may help explain why there
is negative information on
your credit report.
Bad but
True….
 Credit agencies are require to accept these
statements if they explain why the
information is incorrect
 Credit agencies can send these statements
to anyone who received a copy of your
credit report in the last six months
 They do not have to accept statements as to
why you had past problems, but many do
You can only
dispute negative
information on your
report if the
information is more
than 7 years old (or
10 years old for
bankruptcy).

27. How to do it…
 Keep statements
brief
 Use under 100
words
 Send to the credit
reporting agency
Your
Statement
If the negative
information shows
up on reports from
more than one of the
reporting
agencies, send your
statement to all of
them.

28. Have you…
In the Past…
 Made arrangements to
pay off the loan/debt?
 Is the problem several
years old?
If so, the creditor may be
willing to contact the
reporting agency on your
behalf.
It doesn’t hurt to ask!
Creditors/Lenders
can contact the
credit reporting
agencies and ask
them to remove
the information
from your report.

29. Federal law requires that
creditors at least consider
any explanation you have for
a negative entry on your
credit report.
Tell it to the
lender:
It is recommended that you
explain
 why you had temporary
credit problems
 what steps you have
taken to resolve the
problem
 why your finances are
more stable now
Explain why
you had credit
problems
directly to the
lender to whom
you are
applying.

30. Credit Repair Agencies
 Most experts suggest you avoid them
 These companies often charge hundreds or
thousands of dollars for simple services you can
do for free
 Services you need help with are often available
through trusted community organizations
 Many do things which are illegal, which can get
you into trouble
 Credit repair agencies often make your problem
worse
Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade
Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money
Disappear.”

31. False Claims
Claim: Only they can remove old or inaccurate information.
Truth: You can do this yourself.
Claim: Even if the information is accurate, they can fix it.
Truth: It is illegal to lie to a credit reporting agency in order to
remove negative information. You could be prosecuted for
this.
Claim: They can guarantee you a credit card or loan.
Truth: You often can’t trust the offers (high fees and interest
rates they would benefit from).
Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade
Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money
Disappear.”

32. Potential Problems
 Some credit repair organizations
advertise and engage in unfair
business practices
 The Credit Repair Organizations
Act (CROA) outlines prohibited
practices, required disclosures and
contract requirements

33. Credit Repair Organizations Act
The CROA is part of the Consumer Credit Protection Act, it stipulates:

Credit repair organizations must give you a copy of the “Consumer Credit
File Rights Under State and Federal Law” before you sign any contract

You have three days to cancel a contract without paying any fees

Credit repair agencies cannot:

make false claims about their services

collect fees from you until they have completed the promised
services

Perform any services until you have signed a written contract
Source: National Consumer Law Center, “The Truth About Credit Reports and Credit Repair Companies;” Federal Trade
Commission “Credit Repair: Self-Help May Be Best;” Consumer Action, “Credit Repair Scams: They Make Your Money
Disappear.”

34. You Can
Improve Your
Credit
Report!

35. Check Your Credit Report
Once a year
It’s free
Verify accuracy

36. Resolve Errors
If negative information is correct,
 send the reporting agencies a
personal statement
 this will be included when your
report is sent out

37. Develop Good Credit Habits
 Good credit habits boost your credit
score
 Credit scores are constantly
changing
 Recent information counts more
than older information

38. Build Your Credit
 A secured loan can help you build new
credit
 loans are secured by money you have
in a savings account
 credit unions and banks may offer this
service
 Secured loans help rebuild credit too

39. Responsible Lenders Only!
Avoid credit card offers
and lenders who may
promise you “fast cash”

40. Shop Around for Credit
Compare offers from at
least two or three creditors
Make sure you get the best
offer possible

41. Cancel Cards?
Consider cancelling cards with
unfavorable terms
Consider keeping only a few
credit cards
Keep cards with the best
interest rates and terms
possible

42. Good Source for
Information:
National Consumer Law
Center:
“Surviving Debt: A Guide
for Consumers”

43. Other Resources
“The Truth About Credit
Reports and Credit Repair
Companies”
“Credit Repair: Self-Help May
Be Best; Consumer Action”
“Credit Repair Scams: They
Make Your Money Disappear”

44. Helpful Website:
http://www.nedap.org/
Resources for Consumers
Credit Report Info Packet
Annual Credit Report Request Form
Sample Credit Report Dispute Letter
Sample Follow-up Letter
Sample Credit Card Dispute Letter

45. Need Help with Your Credit Report?
Call the CLARO Hotline: (716)828-8432
Thank You!
This concludes the slideshow Your Credit Report.
Visit CLARO online at http://clarobuffalo.org/