Some aspects of the financial industry thrive off consumers that have low credit ratings. These are the customers that are most likely to carry balances on credit cards, pay late fees and be willing to foot high interest rates. The low end of the credit score bracket is the cash cow for certain lenders.
It is important that you not be part of that bracket. There are things that you can start doing today to help you understand your credit history and help you work towards a better credit rating. Understanding the rules and regulations can be time consuming and sometimes confusing, but there are a number of financial coaches that can help guide you out of the low credit rating hole if you are concerned about taking it on by yourself.
This was good news for consumers all around the country, but few of them ever heard it. Instead of individuals taking advantage of the regulations, “free credit report” companies began popping up. For a small membership fee you can check your credit history and help keep an eye on your credit score.
The government has been trying to help consumers work through credit histories. As far back as 1971 the congress passed the Fair Credit Reporting Act. Unfortunately for consumers, the banking industry lobbyists got into the mix and the bill that was passed did very little to help consumers.
It wasn’t until 2003 that things took a big turn in the direction of the consumer. The Fair and Accurate Credit Transaction Act served consumers by giving them access to their credit histories for free. It also put a time limit on investigations into a credit report dispute so that reporting agencies would have to act within 30 days. Consumers would even be allowed to bring up the disputes directly with the companies involved and not just go through the reporting agencies (and the companies would be held to the same regulations and time restraints as the reporting agencies).
Paying some company for what could be accessed for free is better than not checking your credit history at all. But there is another way - often easier and better for the consumer - to monitor your credit history and deal with any problems that may come up.
Access your true free credit reports at annualcreditreport.com. You can choose from the main reporting agencies – there are three – and you have the right to receive one free report from each of them each year.
Every four months return to the annualcreditreport.com website and access another of your free credit reports.
These two simple steps will help you monitor your credit history for any suspicious activity and it will also allow you to challenge any errors that might appear. Keeping an eye on your credit history is one of the easiest ways to maintain your credit rating. These free credit reports do NOT include your FICO score. If you need to view that it will usually cost a small fee to receive that number with your free report.
Not everyone is comfortable doing business over the internet and that is fine. You can also request your free credit reports by phone or by conventional mail and you should receive them in approximately 20 business days after the request is made. When making the request by mail you will have to download a form from the annualcreditreport.com website. You can call 1-877-322-8228 to request the information by phone but you will be required to give out personal information (like social security number). The government website www.ftc.gov offers more information when you click on the Free Credit Report link.
Monitoring your credit history is one of the best ways to maintain control over your credit score. It only takes one or two bad reports to do severe damage to your credit score that will have repercussions in all aspects of your life. Repairing the damage from that bad report will go better the sooner the problem is caught.
You can monitor your own credit history by utilizing your free credit reports. There are also companies that will help you monitor your credit history for a small monthly fee. You can find extra help for your credit rating by contacting a financial consultant or counselor. The important thing is that you monitor your credit history so that you can fix any problems before those problems push you into the lower bracket that feeds the lending industry the majority of its profits.
Next: Understanding Credit Score