My credit report shows my credit rating: Myth.
Technically, there is no such thing as a credit rating. Credit reports are only
useful by their ability to accurately reflect a consumer’s credit history
and ability to make repayment of debts on time.
My credit report and credit score are the same thing: Myth.
Your credit report is a listing of demographic information, credit accounts and
your payment history. A credit score is a point system that the majority of creditors
use to determine the amount of risk involved in lending you money - will you repay
it according to the agreed terms - and can make a significant difference in the
interest rate terms you’ll be offered for future credit.
Your credit report is a listing of
demographic information,
credit accounts and your
payment history
My credit score is a set number: Myth.
Your credit score is re-calculated each time your credit report file is accessed.
Credit scores are determined by placing a point value on your payment history, how
much you owe on all your accounts compared to the credit available to you, length
of your credit history, amount of new credit you have sought, and the types of credit
you are using. During this process your credit report is also compared to like histories
of other consumers to calculate the final credit score.
Only creditors and I may view my credit report: Myth.
Not only do creditors view your credit report but also insurance companies, (to
calculate rates you are charged) employers, and landlords. Your private information
can and is sold to others without your permission or knowledge by the credit bureaus.
Examples of these activities are the many credit solicitations you receive in the
mail each month.
As long as I make my payments on time I don’t have to worry about my
credit report: Myth.
Experts now recommend you review your credit report on at least an annual basis.
In fact, current laws allow you to receive a free copy of your credit report annually
from the three major credit bureaus. Why is this important?
Credit Reports Contain Only Accurate Information: Myth.
Ninety percent of all credit reports contain inaccuracies. As many as 80% could
have errors that would negatively affect a credit score The types of errors that
surveys and research studies found on credit reports included errors of personal
identifying or demographic information, such as name, address, social security number,
inaccurate reporting of consumers’ account status and data, such as limit,
balance, or terms, improper or inadequate purging of outdated information, missing
information or data and information or data from the credit reports of other consumers.
Even more serious errors include accounts incorrectly marked “delinquent”,
credit accounts listed that do not belong to the consumer, and reports listing public
records or judgments that belong to someone else. The prevalence of errors credit
reports has sprouted numerous companies that will review your credit report for
you (at a premium price, of course) and report any errors found to you. Many of
these companies are off shoots of the same credit reporting agencies that list the
errors on your credit report, creating lingering questions about conflict of interest.
There are companies who can help me clean up my credit: Myth.
A search of the World Wide Web also shows a number of companies that claim they
can correct errors or change correct but derogatory information on your credit report
for you or correct errors, again, at a premium price. As a smart consumer you should
recognize this as the scams they are and that some of these companies make recommendations
to their ‘clients’ that encourage dishonesty and in some situations,
illegal behavior. First, only you can complete the process to correct errors on
your credit report, and secondly, accurate information (even if it is derogatory)
will not be removed from your credit report. Most importantly, the only remedy for
accurate derogatory marks on your credit report is time and an improved repayment
history.
My ‘bad’ credit will drop off of my credit report after seven
years: Myth.
While there are some parts of your credit record that will be deleted after seven
years, this does not apply to all listings. There are many different factors and
limitations that affect the length of time listings remain on a credit report.
Credit Advisors Foundation
completes periodic reviews
of your credit report as part
of the service provided in a
debt management program.
I must hire a company to review and monitor my credit report: Myth.
Credit Advisors Foundation reviews and monitors your credit report as a part of
your debt management program service, if you are enrolled in our credit review program.
What does CAF look for during a credit report review?
Within the first six months of your program CAF conducts an initial review of your
credit report. At that time, your credit report is compared to your debt management
program application. Any differences or anything we believe are inaccuracies we
note and report to you, to confirm our findings. (Are the accounts yours? Were you
aware of them? Should they be included in your DMP?) If these differences or inaccuracies
are determined to be errors, CAF Client Care can walk you through the process necessary
to request corrections by the credit reporting agencies.
After the initial review, CAF completes periodic reviews of your credit report.
During these reviews any changes or new differences are also reported to you and
we will again assist you completing the process to correct any determined errors.
Credit report reviews are just one more advantage you may receive in your debt management
program with Credit Advisors Foundation. By including this credit report review
service, the average savings for our clients’ is $60 to $100 annually, as
well as, lowering your risk of identity theft. (Please note: some states do prohibit
CAF from offering this service to clients).
To get help from CAF obtaining and reading my credit report I have to be a DMP
client: Myth.
CAF will help you obtain, read and understand your credit report and score regardless
of whether or not you are a DMP client. If it is determined to be necessary during
the review of your credit report, the certified credit counselors at CAF will also
explain to you the process of filing complaints.
Learning how to complete a credit report error complaint can save you time, stress
and lower the amount of interest you pay on future credit. All of which, assists
you to maintain diligence in monitoring your credit report in your debt free future.