Q: Will My Credit Report Be a Permanent Record?
A: Although the Fair Isaacs statisticians alone decide how a credit score is to be tabulated, federal law makers as well as the legislatures of most every state have set specific regulatory boundaries upon what can and cannot appear in a credit report. Specifically, this means that some of the less auspicious marks (discharged debts, say, or loans taken over by bill collectors) shall only remain on a given credit report for a specifically designated period of time. With few exceptions, such as unpaid child support, even the worst offenses – Chapter 7 debt elimination bankruptcy protection, for example – shall be wiped away from the public record by dint of law within seven to ten years.
Q: Should I keep all of my credit cards once I am fully clear of credit card debt?
A: Even though consumers’ first charge accounts or credit cards rarely offer the best deal, comparatively limited credit ratings and income potential forcing most neophyte borrowers to accept higher interest and even monthly or annual administrative fees, eating the small cost each year to brighten their credit scores as determined by either the Vantage or FICO model might well be worth the expense.
Q: How many credit bureaus are there?
A: Considering they’re private companies whose number and prominence grew organically over the past century, there could as easily have been one credit bureau or a dozen separate agencies serving the same purpose. During the industrial revolution, formal and independent businesses whose sole concern was recording consumer credit histories seemed as foreign a concept as universally agreed upon credit scores. Nonetheless, through the vagaries of capitalism, Experian, Equifax and TransUnion became the only arbiters of credit worthiness throughout North America you need to remember.
Q: Can I really get a credit report for free?
A: In accordance with the Fair and Accurate Credit Transactions Act of 2003, you can obtain a free credit report from each of the three major credit bureaus on a yearly basis. Reports can be ordered online (these are usually received instantly) or by calling the toll free numbers during normal business hours (phone orders are mailed). When requesting a free credit report, you can also get your credit score calculated for a fee of six dollars and ninety five cents. It is a good idea to get all three scores, as calculations will vary slightly, and lenders either tend to average the three numbers or select that one which is median. In order to prevent unwelcome surprises, you should check your credit score a few months prior to applying for a loan and recheck it often to be sure that there are no errors.
Q: What if I just want my credit rating to stay at the same level?
A: For the particularly paranoid consumer, it’s possible to place your credit in stasis by paying a negligible fee (under ten dollars, most likely) to freeze the reports and deny access to anyone who does not enter a password. Under normal circumstances, credit scores could effectively – if not quite legally – be pulled with just a name, address, and social security number. In general, the threat of identity theft towers over the barely noticeable realities, but sloppy under writers and loan officers could unknowingly destroy a credit rating by repeated filing inquiries that temporarily knock fifteen points off the FICO scores with each request. While only a miniscule number of United States citizens will gain more peace of mind from a credit freeze, the ease of calculating credit scores over the internet and the sheer importance of FICO credit ratings to modern lives should make anyone think twice.
