Building a better credit record
- By Milt x_Zall
- May 03, 2002
Newspapers, radio, TV and the Internet are filled with advertisements that
offer -- for a fee -- to erase accurate negative information in your credit
file. The scam artists who run these ads can't deliver. Only time, a deliberate
effort and a plan to repay your bills will improve your credit record.
The process of checking on and repairing your record starts with understanding
some basics about credit reporting agencies and credit reports. A previous
column reviewed common questions and answers people have about these matters
("Credit report Q&A,"
FCW.com, Dec. 7, 2001), and this column is the first in four-part series
that examines how to repair your credit record, how to deal with debt and
how to avoid scams.
What's in the Report?
First, you should know that CRAs - most commonly a credit bureau --
collect and sell four basic types of information:
* Identification and employment information: Your name, birth date,
Social Security number, employer and spouse's name are routinely noted.
The CRA also may provide information about your employment history, home
ownership, income and previous address, if a creditor requests this type
* Payment history: Your accounts with different creditors are listed,
showing how much credit has been extended and whether you've paid on time.
Related events, such as referral of an overdue account to a collection agency,
also may be noted.
* Inquiries: CRAs must maintain a record of all creditors who have asked
for your credit history within the past year, and a record of those persons
or businesses requesting your credit history for employment purposes for
the past two years.
* Public record information: Events that are a matter of public record,
such as bankruptcies, foreclosures or tax liens, may appear in your report.
Know Your Rights
The Federal Trade Commission enforces several credit laws and provides
consumers with free information about them:
* The Equal Credit Opportunity Act prohibits the denial of credit because
of your sex, race, marital status, religion, national origin, age or because
you receive public assistance.
* The Fair Credit Reporting Act gives you the right to learn what information
is being distributed about you by credit reporting agencies.
* The Truth in Lending Act requires lenders to give you written disclosures
of the cost of credit and terms of repayment before you enter into a credit
* The Fair Credit Billing Act establishes procedures for resolving billing
errors on your credit card accounts.
* The Fair Debt Collection Practices Act prohibits debt collectors from
using unfair or deceptive practices to collect overdue bills that your creditor
has forwarded for collection.
How to improve your credit report.
Zall, Bureaucratus columnist and a retired federal employee, is a freelance
writer based in Silver Spring, Md. He specializes in taxes, investing, business
and government workplace issues. He is a certified internal auditor and
a registered investment adviser. He can be reached at email@example.com.