Building Better Credit Report Essay Research Paper

Building Better Credit Report Essay, Research Paper

Building a Better Credit Report

The American dream is a puzzle, both for those who study it and for those who pursue it. We should never forget that this dream is connected to the credit as much as a fragile flower to the sun. What would you say is the American dream. Today s American dream, Lendol Calder, author of the Financing the American Dream replies, includes a house in the suburbs with a backyard for the kids to play in, a patio for barbecues, a shady street bright and obedient children, camping trips, fishing, two family cars, seeing the kids taking parts in school and church plays, and online access to the world (3). This is not the end of the puzzle. In fact, it s just the beginning. To reach this dream is necessary to keep credit clean and under control. There are important things that need to be done to improve credit.

There are three important players in the consumer credit game; creditors, credit reporting services and credit repairing agencies. All of them are in the game to make money but none of them are truly here to help the consumers. Creditors are the first one. They allow clients, purchasers, customers and buyers to use future income to purchase goods and services today. In exchange, creditors expect to make their own profit by applying interest (Hammond 17-18). All the creditors put trust in one another significant player in the credit game, the credit reporting service. Information on millions of American consumers is gathered by these services to provide creditors with credit histories on every one of them. Three national agencies compile credit reports; Experian, Equifax and Trans union. In fact This information is provided to them by individual creditors such as department stores, mortgage companies and banks, known as subscribers in credit bureau parlance. (qtd. in Hammond 18). Consumers credit history is being evaluated each time they apply for new credit or an extension. Creditors want to be secure that everyone is a good risk by checking credit history before approving your request. Credit repair agencies are also important players in the credit game. They claim to be able to influence credit rating and to change it for the better. As Hammond observes, Historically, such businesses have often been scams operations, skipping the town before unwary customers realize their credit rating are unchanged but their bank balance has dropped. (21-22).

Most of credit consumers need to repair credit. The first step to improve credit is by requesting your credit report. To request a copy of credit report, consumers must enclose a copy of driver s license, credit card bill or utility bill. If it s the first time it should be included full name, address, previous address, social security number, and a copy of a billing statement (McNaughton 68). The credit reporting services charge eight dollars for a report, a fee that is waived if you are unemployed or disabled. In fact, Edwards Audrey, author of U-Do-It Credit Repair notes, By law, if you have been turned down for credit, each of the three major credit bureaus must send you a copy of your credit report free of charge (1). To get this free report the consumer s request must be accompanied by a copy of the denial letter. Once a copy of credit report has been received, determine the status. Unfortunately, 70% of American consumers have at least one item in their credit report that is negative (Hammond 41). Trouble is, the information may well be incorrect, misleading or inaccurate. It is definitely recommended to attempt to remove all erroneous information by writing to the credit bureau to dispute all entries you think are inaccurately reported. Check all the dates, amounts and account numbers. When a dispute is filled, it is the creditor s responsibility to respond about the disputed item. The credit reporting agency will complete the investigation with the creditor within 30 days. If the dispute is not answered by the creditor or it is unverifiable, the item must be removed (Jones 2). Now we know how to get credit report and dispute erroneous information when it s false.

Credit repair clinics are useless and unnecessary to improve credit rating. They offer to help clean up your credit by using loopholes in the law that only they know about. Some repair clinics may even get consumers into legal trouble by encouraging them to distort the information in the credit file or by helping to initiate a new file with a new address and federal identification number (Rowland 2). There are three ways to create a new file. Same name different personal information, different first or last name and the same personal information and the last of all is to use an alias name with same or different personal information (Jacquelyn 1). The Federal Trade Commission adds the warning that consumers may be prosecuted for mail or wire fraud if they provide false information when requesting for new credit or an extension (Paradis 1). This illegal businesses are easy to recognize. Usually are located in different state with the one that they operate. If it s the same state they would change locations, names and phone numbers very often (Avdrey 1). According to Brown, The companies that have been accused of file segregation by the F.T.C. are listed on the web (www.ftc.gov) (1). Some experts suggest the nonprofit organizations. Most of them will be free or