Credit reports and credit scores influence our lives in many ways. Your history of credit management can affect the cost of the credit you receive, your ability to rent or buy a home, the insurance rates you are offered, and even your future employment opportunities. By understanding the world of credit reports, you can create a positive credit standing that will allow you to achieve your goals quickly and inexpensively. This program will cover:

• Credit Reporting Agencies
• What is in Your Credit Report
• Understanding Credit Scores
• How to Improve Your Credit Standing
• Consumer Rights and Identity Theft

Chapter 1: Credit Reporting Agencies

There are three major credit reporting agencies, commonly called credit bureaus, in the United States: Equifax, Experian, and TransUnion. It is the credit bureaus’ role to collect credit and financial information about you and compile it into a report. Most of the data is gathered from creditors, such as credit card companies and mortgage lenders, and collection agencies. Companies typically report account activity to the bureaus (usually to all three but some to just one or two) on a monthly basis. The credit bureaus also acquire information by searching court records for judgments, bankruptcy filings, and other credit-related legal actions.

The credit bureaus sell the compiled reports to interested parties, such as creditors, insurance companies, employers, and landlords. Does that mean that a nosy neighbor or relative can pull your credit report if he or she wants to? No. The only people that can see your credit report are you and those that have a legitimate business use for the information. If your employer wants to see your credit report, they must get written permission from you first. Keep in mind that the credit bureaus only supply reports – it is not their role to approve or deny you for credit or other opportunities.

When is the last time you looked at your credit reports? Financial experts recommend that you check your three credit reports at least annually. By reviewing your reports, you can catch errors and fraudulent activity, as well as see what can be done to improve your credit score. You can obtain a free copy of each of your credit reports once a year through Annual Credit Report Request Service. (Contact information is in Chapter 5). If you request the reports online, you should be able to view them immediately. You can also order your reports directly from the credit bureaus for a fee.

Other Consumer Reports
While credit reports are the most widely used consumer reports, there are other reports that monitor your financial habits, including:

• ChexSystems – ChexSystems is a report frequently used by financial institutions when determining whether to allow someone to open a checking or savings account. ChexSystems reports on negative banking activities, such as overdrawn accounts and checks returned for insufficient funds. There is no standard for adding information to the report. Some institutions will report a check that bounced due to a miscalculation, where others may only report cases of fraud. Information can remain on your report for five years. Like with credit reports, consumers can get a free copy of their ChexSystems report and dispute incorrect information.

• National Tenant Network – Used mostly on the West Coast, The National Tenant Network (NTN) compiles information on lease violations and evictions and provides it to landlords who subscribe to their service. Potential landlords may check both your credit report and your NTN report when deciding whether or not to rent to you. You have the right to request and inspect your report and dispute inaccurate or incomplete information.