If you have a pulse and bills, you are being tracked by three agencies in the United States. They know where you live, where you used to live, who you are married to and even how much your car payment is. They probably know more about you than you do, at least when it comes to your financial habits. These three agencies are none other than Experian, Equifax and TransUnion, the three major credit reporting agencies in the U.S.
* TransUnion: Consumer Disclosure Center, 2 Baldwin Place, P.O. Box 1000, Chester, PA 19022
These three agencies track over 200 million Americans and store their information in huge databases. They are responsible for producing more than half a billion credit reports each year. Millions of lenders and companies report to them each month and tell them if you paid your bill on time or if it was late, and they do this for the other 200 Million as well. This is a lot of information to store, and for the most part, credit agencies do an excellent job at keeping things straight. But they do make mistakes, after all credit agencies are managed and ran by humans.
Human error is the number one cause of mistakes on credit reports. Names, social security numbers and addresses can be easily entered incorrectly. People with similar names may be confused. If you are a woman and have been married or divorced, your name change and change in status may cause some confusion as well.
Mistakes can also be made when you dispute a negative file on your report. If you ever had to dispute an entry on your report, you would likely sit down and write a worded letter explaining all of the reasons why the item in question should not be on your credit report. Your lovely letter is then sent overseas so that data entry personnel can enter your complaint into the system. But rather than enter your actual words into the system, they condense it down to a two-digit code that means something: not mine, did not authorize and so forth. This two digit code is then sent to the creditor so that the creditor can review your complaint and verify their remark. If they cannot, it will be removed from your report.
As you can imagine, this two-digit system leaves a lot of room for errors and does not really give you a voice. Added to this is the fact that data entry personnel get paid for every entry that they put into the database no matter if it is correct or incorrect. Rewarding workers for quantity not quality has also added to the problem.
It is estimated that nearly three quarters of all credit reports contain errors. Most of these errors are not really a big deal, but some of them can cost you your credit standing.
When you pay your credit card bills, your loan balance, or your medical bills, this information is recorded and sent to credit reporting agencies, or credit bureaus. It is their job to keep track of your credit history and other information about your life, such as where you have lived, where you work, your marital status, and any legal action taken against you. Today, thanks to the Fair Credit Reporting Act (FCRA), you have the right to know what is on your credit report.
There are three main credit bureaus: Equifax, Experian, and Trans Union. Each agency has a slightly different report on you because not every credit card company, retail store, or hospital reports your payment history to the same agency. This can be a tricky part of managing your finances, so it’s important to know about three areas where you might get ripped off.
1. Charging for credit reports The FCRA has established a yearly rule about free credit reports. You are eligible for a free report from any and all of the three major credit bureaus every twelve months. However, if you go directly to the agency, you may be charged for the report. Instead, search for free credit report online and get your copies at the secure website provided.
2. Posting inaccurate information It is very important for you to know what is on your credit reports. The fact is that this information has a great deal of influence on your standard of living. Because each agency gets its information from different sources, each report may contain different inaccuracies about your total debt, your payment history, or even your legal name. So get a copy and protect yourself from these errors.
3. Concealing sources of information In some cases, a special report called an investigative consumer report is ordered to evaluate your standing in the community, get personal recommendations, and professional recommendations. You will always be notified when one of these reports is ordered from a potential employer or financial institution. However, once the report is completed, you may or may not have access to the sources of the information, so be cautious in authorizing this type of investigation.
Both Jay Delgado & Rebecca Spitzer are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.