line and a 21% interest rate or an American Express Gold with an unlimited credit line.
As with the Johnsons, it is a very bad idea to assume your credit is as it should be. There could be an unintentional mistake on the part of the credit reporting agency (CRA) or an information provider such as a credit card company. Student loan organizations or mortgage lenders may have records that reflect you still owe them, while you are certain that your bills have been paid. Your former spouse could have agreed to pay all of your joint debts in your divorce decree, but several years later you learn that one of the debts appears on your credit report. Or, worse, yet, you could be a victim of identity fraud if another person uses your Social Security number. We’ve polled several experts who offer tips on how you can protect yourself from credit foul-ups. Here’s what they suggest:
GET A COPY OF YOUR CREDIT REPORT
All of our experts agree that, without a doubt, every consumer should order a copy of his or her credit report at least once a year. “Any consumer who is thinking of making a large purchase such as a home, car, or condominium should first get his or her credit report from all three major credit bureaus. The reason is [that each agency] may have different records and you don’t know which [agency] a company will use,” says Shirley Rooker, president of Call for Action, an international nonprofit network of consumer hotlines in Bethesda, Maryland.
You can call, write, or go online to order credit reports from the three major CRAs (see sidebar). These companies gather and sell data–which reveals information about your credit worthiness–to creditors, insurers, employers, and other businesses.
There is no charge for a credit report if you have been denied credit, insurance, or employment as a result of what your credit report reveals, or if you’re the victim of identity theft. However, you must request your credit report within 60 days. Also, you are entitled to one free report a year if you receive welfare benefits, your report is inaccurate because of fraud, or if you are unemployed and plan to work within 60 days. Some states require credit bureaus to offer consumers a complimentary report, even if they are not denied credit. Other states charge up to $9.20 per report. When ordering a report, provide your full name, current address, previous address, spouse’s name (if applicable), Social Security number, and date of birth.
ENSURE YOUR REPORT IS ACCURATE
Once you have received and reviewed your credit report, it is important to remember that regardless of what any credit report “doctors” or “clinics” may advertise, they cannot change correct information on your credit report–even if it is negative. Accurate, negative information (i.e., late payments) cannot be removed for seven years. It takes 10 years for bankruptcies. However, you have a right to correct and have complete information on your credit report under the Fair Credit Reporting Act (FCRA).