Frequently Asked Questions

The three main credit bureaus are Equifax, Experian, and TransUnion. These bureaus collect and store the consumer's information and credit histories, which helps lenders see the consumer's creditworthiness. The 3 Bureaus are for-profit companies that gather information about consumers and sell it to businesses legally permitted to access credit reports. This is how "Pre-Approved" offers are generated and mailed out to the consumer. (You are really NOT pre-approved).

** It's important to know that each creditor pays each bureau a fee to enable that creditor to report the good payment info and late payment or collection info!

Many organizations offer consumers choices regarding the use of their personal information, including the ability to "opt out" of having their information shared or used for marketing purposes. To opt out of offers and prevent third parties from accessing your information, visit the credit bureau websites. Look for the "Contact Us" page and locate the information for opting out, or visit www.optoutprescreen.com. Also, when you enroll with us, we will submit the opting-out form for you, as you've authorized.

A credit score is calculated using several factors. It is important to remember there are many different scoring models that let you see "a score" for your FICO Score.

• Payment History (35%): This includes account payment history on various types of accounts, the presence of negative information, public records (such as bankruptcy or judgments), collection items, and delinquency. It also considers the severity and frequency of delinquency, the amount past due on delinquent accounts, time since past due items, and the number of past due items on file.
• Outstanding Debt (30%): This factor considers the amount owing on accounts, including specific types of accounts, and the number of accounts with balances. It also looks at the proportion of credit lines used and the proportion of installment loan amounts still owing.
• Length of Credit History (15%): This includes the time since accounts were opened, the time since account activity, and the types of accounts opened.
• Types of Credit Currently in Use (10%): This factor considers the number and types of accounts, such as credit cards, retail accounts, installment loans, and mortgages. Ideally, a good mix of credit is the desired goal.
• New Credit (10%): This includes the number of recently opened accounts, recent credit inquiries, time since recent account openings, and re-establishment of positive credit history following past payment problems. *Inquiries will ding your credit 3-7 points and remain on your credit file for 2 years!

Credit scores are used by creditors to assess the risk of a consumer applying for a loan or credit line. They reflect the consumer's financial responsibility based on past and present credit use. Creditors use the score to determine how likely a consumer is to pay back a new loan or credit line.

A credit report serves as a financial resume, containing information grouped into five categories. While the information and its contents are known, the specific formula used to calculate credit scores was created by the Fair Isaac Company, known as the FICO Score.

According to the Sun-Times (January 18, 2011), "Some studies show that up to 80 percent of all credit reports have some type of error."

An alarming number of credit files contain serious errors, which could lead to credit denial, loan rejection, or even impact job opportunities. Monitoring your credit report is highly encouraged to minimize or eliminate future credit denials. Maintaining a good credit report is essential for a new start and financial health.

The five categories of information on a credit report are:

1. Identification Information: Name, date of birth, employment, current and previous residential addresses, and Social Security number.
2. Public Record Information: Records of bankruptcies, foreclosures, tax liens, garnishments, and other civil judgments.
3. Exploration Information: Individuals or companies that have requested information from an individual's credit file, including the date of inquiry and its purpose.
4. Trade Line Information: Detailed information reported by creditors and other furnishers on each current and past loan, lease, or other debt, including payment history.
5. Collection Account Information: Information reported by collection agencies regarding the debt includes the original creditor, charge-off status, and payment history.

The credit bureaus retain personal credit history for approximately 7 to 10 years from the date of the last activity or the original delinquency date.

• Closed/inactive accounts: 10 years
• Bankruptcies: 7-10 years
• Derogatory/collection accounts: 7 years
• Public records: 7 years
• Unpaid federal tax lien: indefinitely

There are 10 basic items that can have a negative impact on your credit report, listed below from least to most severe:

1. Credit Inquiries
2. Collections & Charged Off Accounts
3. Late payments
4. Past due and unpaid payment
5. Court judgments
6. Collections
7. Repossession
8. Foreclosure
9. Bankruptcy
10. Unpaid Federal Tax Lien

These items can significantly impact your creditworthiness and financial standing. It's important to address any issues promptly and work toward improving your credit report.

Individuals have specific rights regarding their credit file under state and federal law. The FCRA (1970) is the Fair Credit Reporting Act and are the laws that govern what is allowed to be on your credit file and for how long. The FDCPA (1978) The Fair Debt Collection Practices Act are laws that govern how a collection agency attempts to collect a debt. The FCBA (1974) are the laws to protect the consumer from unfair billing practices:

1. Dispute Inaccurate Information: You have the right to dispute inaccurate information in your credit report by directly contacting the credit bureau. However, neither you nor any credit repair entity has the right to remove accurate, current, and verifiable information from your credit report. The credit bureau must remove inaccurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for up to 10 years.
2. Access to Your Credit Report: You have the right to obtain a copy of your credit report from the credit bureaus, which may charge a reasonable fee. However, there is no fee if you have been denied credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days.
3. Assistance with Interpreting Your Credit File: The credit bureau must provide someone to help you interpret the information in your credit file.
4. Free Credit Report: You are entitled to receive a free copy of your credit report once per year and if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud.
5. Right to Sue: You have the right to sue a credit repair organization that violates the Credit Repair Organization Act, which prohibits deceptive practices.
6. Cancellation Rights: You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed the agreement.
7. Dispute Process: You may notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service.
8. Statement of Dispute: If the credit bureau's reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you.

The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information, contact The Public Reference Branch, Federal Trade Commission, Washington, D.C.