Understanding Your Credit Report

It's in the Bank...There is a data bank out there that has been keeping tabs on you since the day you got your social security number. They probably know more about you than you know about yourself:

• Your buying habits
• The stores you frequent
• Your payment history
• Your employer's name
• and much more

It's the age of electronic information gathering.

Is the Credit Bureau Picking On Me?

The credit bureau (your local version of a data bank) does not randomly pick on anyone. They don't have any influence or control over what your creditors tell them about your payment history.

They Just Report the Facts!

Credit Bureaus are regulated by federal and state laws to strictly report the "Facts" about your payment history for: car loans, personal loans, credit cards, mortgages, etc.  However, there is a large degree of "human error".  Credit reports are usually pretty accurate and rarely 100% correct.

O.K. I'm ready to buy a home. What will my credit report mean?

Whether you are applying for a credit card, book club or the REALLY BIG ONE, your mortgage, your personal credit report is the single most important factor in determining whether you get mortgage approval and what rate you will pay. A consistent income and substantial down payment (assets) will help, but will not eliminate bad credit.

"Uh oh, Mr. & Mrs. Homebuyer, you have some credit problems. From time to time, almost everyone has credit problems. In most cases, they can be resolved. Your Hagood Mortgage Loan Officer can set up a pre-application appointment to assess your credit report. Other information that will be needed and evaluated are: length and stability of employment, monthly income, rental or mortgage history and assets available for your purchase.

A Loan Officer will help evaluate your credit situation based on the seriousness of your credit problems.

What Can I Do to Dispute My Credit Rating?

This is one situation where patience is the only virtue. To correct an inaccurate credit report, or to obtain an actual copy of your credit report, do the following:

Visit or call the local credit bureau. (Keep in mind that the credit bureau is only reporting exactly what your credit grantors have told them.)

Start by disputing the discrepancy directly with the lender.  If the lender agrees it is incorrect, they will re-report to the credit bureau.  This will still take 30 - 60 days to remedy.  In the mean time, get a letter from the lender of the inaccuracy.  If the lender is unwilling to cooperate, you must be able to prove your point by offering proof (cancelled check or receipt) of the payment in question.  If proof cannot be furnished, you may end up paying again, just to correct the report. Save those receipts and cancelled checks.

Inaccuracies can usually be overcome with patience and some additional documentation stating your case.

I Can't Even Get a Credit Card. How Do I Establish Good Credit?

There are several ways in which to obtain credit or change your credit to a favorable rating.

1. Make a trip to the credit bureau to evaluate your current rating with a consumer assistance counselor.
2. Apply for a secured credit card by going to your local bank and explaining your situation to the manager. You may have to deposit money into an account that the bank will hold to guarantee receiving your payments.
3. Use the credit regularly and pay the balance in full every month.  Don't change your buying habits because you have credit.
4. Establish a payment plan with any past due accounts or pay any past due accounts in full if possible.

How Long Will My Credit History Follow Me?

Most accounts remain on your credit file for seven years with the exception of PAID SATISFACTORY accounts and BANKRUPTCIES, which remain for 10 years.

Is Big Brother Everywhere? What Happened to My Right of Privacy?

• Fair Credit Reporting Act.
• Federal Equal Credit Reporting Act.
• The Right of Financial Privacy Act.