The information is not analyzed but simply reported by these bureaus and typically includes the high and present balance of each account, current or delinquent status of any payments, and any collection action taken by a creditor. Your credit report may be requested by anyone having a legitimate or potential business relationship with you and each time your credit report is requested, the inquiry entity is noted in your credit file for usually a six month period.

When evaluating your loan request, the lender will almost always order both a local and national credit check on you and any co-borrowers. Unfortunately, credit reports are not always accurate and may sometimes give a misleading picture of past credit problems that were resolved. They may also provide wrong information or contain unrelated information on other individuals. You should take immediate action to correct any erroneous information.

Correcting An Erroneous Credit Report

The Fair Credit Reporting Act requires credit bureaus to correct inaccurate or incorrect credit information and at no cost to the consumer.  

For a small fee, you can generally request your credit profile from a credit reporting agency.  It is wise to obtain a copy of your credit report to avoid any unpleasant surprises or risk the chance that you could be denied a mortgage on the basis of misinformation contained in the report.  This will provide an opportunity to correct any errors before you apply for a mortgage. Any unresolved disputes with a creditor should include your explanation of the situation.

Any documentation or explanation supporting your claim must be submitted to each credit reporting agency. They are then required to investigate your dispute in a timely manner. If the dispute is not resolved, you may file a statement of usually up to 100 words explaining your position. 

If you have never seen your credit report, you may obtain a copy over the internet or by calling the Bureaus listed below.

Experian  1-888-EXPERIAN (888) 397-3742  (fees apply-order now!)   Note: Experian will provide one free copy of your credit report for select states...not applicable in North Carolina)

Trans Union  (800) 888-4213  Order a report now!  (fees apply)

Equifax   888-532-0179   Order a report now! (fees apply)

Get a detailed 3-Bureau merged credit history! (fees apply)

Repairing a Bad Credit Report

If you are currently experiencing credit problems, you may not be in a position to buy a house until these problems are resolved. Although your past credit record may not be as clean as you like, your recent track record of keeping debt payments current  is more persuasive to lenders. By law, most unfavorable credit information is dropped from your credit file after 7 years although bankruptcies, judgments, and repossessions remain on the report for up to 10 years.  

If you have been denied credit based on a derogatory credit report, you may request a copy from the lender. All consumers have the legal right to analyze, correct, or dispute their credit history.  

Usually, a few minor delinquencies will not prevent loan approval for a mortgage, car, or credit card as long as the majority of a borrower's credit record demonstrates a satisfactory history. To ensure that your credit report is reviewed in the most favorable light, you should take the following steps:

1. Explain all delinquencies, no matter how minor, in a satisfactory manner to the lender. More recent delinquencies should be explained in greater detail since they may impact loan approval.

2. Explain all recent credit inquiries from other creditors by stating the purpose of the request, whether or not the credit was extended, and the current terms. Numerous inquiries in a credit report is viewed negatively and may give the appearance that you have applied at other institutions without success.

3. Make sure that all charge-offs, liens and unpaid judgments, no matter how small, are shown as paid prior to obtaining loan approval.

There are loan programs available that may assist borrowers with credit difficulties. Some of these programs may allow a borrower to place as little as 15% down and immediately obtain a loan.  The interest rate is usually higher because of the higher risk however, if a borrower is able to maintain an excellent credit record for twelve to twenty four months, he/she may later refinance the loan at a lower rate. 

Be leery of companies that claim to be able to "repair" consumer credit reports. Some of these organizations may attempt to use loopholes in the Fair Credit Reporting Act to convince creditors and credit bureaus into altering correct information. The Federal Trade Commission recently announced that "there are no legitimate credit repair organizations in the United States."   

What If I Have No Credit?

Most lenders will require some track record to indicate a pattern of repayment responsibility. If you do not have a traditional credit record that shows repayments such as credit card purchases, a car loan, or a student loan, it is still possible to establish a credit history. Suggested non-traditional methods of establishing a credit history include having your monthly rent payments to a previous landlord, utility payments, or other recurring obligations documented as part of your credit file.  

Obtain a copy of your credit report over the internet or by calling the Bureaus listed below.

Experian  1-888-EXPERIAN (888) 397-3742  (fees apply-order now!)   Note: Experian will provide one free copy of your credit report for select states...not applicable in North Carolina)

Trans Union  (800) 888-4213  Order a report now!  (fees apply)

Equifax   888-532-0179   Order a report now! (fees apply)