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You can get free credit reports once a year at www.annualcreditreport.com. You can also get your free credit reports by calling (877) 322-8228 or by completing the Annual Credit Report Request Form from the website and mailing it to: Annual Credit Report Request Service at P.O. Box 105281, Atlanta, GA 30348-5281. You can get one free credit report every 12 months. You should review your credit reports at least three months applying for any major loan so that you have plenty of time to identify and correct errors. You are also entitled to a free credit report if anyone uses information on your credit reports to deny your application for credit, insurance or employment. You can also get free copies of your credit reports if you are the victim of identity theft or have inaccurate information on your credit reports because of fraud.
MOST FREQUENT CREDIT REPORTING ISSUES:
Payment History: Your credit report will show your payment history on consumer installment loans and consumer revolving loans. Your payment history will remain in the credit report for 7 years. If you fall 30-days past due on an account the credit report will retain the 30-day past-due record for 7 years. Your timely payments can be seen but they will be overshadowed by any missed payments.
Charge-Off: If a revolving credit account goes seriously past-due the lender will “charge-off” the account. Thereafter the account will show as a “charge-off” on your credit report with a $0 balance owing. This is misleading. The debt is still active and collectible. You will continue to receive telephone calls and letters from the lender and from collection agencies. You can still be sued on the account. The charge-off will remain on the credit report for 7 years.
Collection Accounts: Collection agencies must give you a written notice of your right to dispute a debt within 30-days of their first contact with you. If you do not object the collection agency will report the matter to credit reporting agencies. The collection account will continue to show on your credit report until 7 years after the underlying credit account has charged-off or, in the case of medical debts, 7 years from when the underlying debt went delinquent.
Student Loans: Student loans appear on your credit report in the same manner as any other consumer debts. One of the dangers of student loans is that there is no Statute of Limitations for collection of student loans. If your student loan goes delinquent it will appear on your credit report as being delinquent for 7 years. Thereafter it will fall off your credit reports. However, the debt is still collectible and the student loan company will come back to collect the debt at some point in the future.
Bankruptcy: After a Chapter 7 Bankruptcy the credit and collection accounts in your payment history will be updated to show a $0 balance owing with a comment about the account being included in bankruptcy. This assures future lenders that they will not have to compete with these pre-bankruptcy creditors for your future repayment dollars. Your payment history will include these debts for 7 years after the bankruptcy. The filing of the bankruptcy will appear in the public records section of your credit report for 10 years.
Public Records: Consumer debt matters that have gone to Court will appear in the public records section of your credit reports. This includes lawsuits, bankruptcy cases and tax liens. Matters in the public records section of your credit report will remain for 10 years.
Your credit score is a major factor in determining the credit that is available to you. This is also referred to as your FICO score. Strangely, credit scores are not available with your ordinary credit reports. You can get access to your credit scores for free at www.creditkarma.com. This website allows you to monitor your credit score and will give you interactive coaching on how to improve your credit score. There are many additional financial and budgeting tools available on this website.
A FICO score of under 630 is bad. This is the credit rating you will have immediately before filing a bankruptcy where there are many unresolved negative issues. A credit score of 630-689 is average. 690 to 719 is good. 720 to 850 is excellent. As of 2012, 25% of the population had credit scores under 600 and less than 20% had credit scores over 800. Californians have poor credit scores overall. The average credit score in California at the end of 2011 was 658 whereas the national average was 681.1.
The most common errors arise after the filing of a bankruptcy. After a bankruptcy debts may still appear with a balance owing with no comment about the bankruptcy, or for the account to appear as a “charge-off” with a $0 balance and no reference to the bankruptcy. These are errors that must be corrected if your credit score is to improve after the filing of a bankruptcy.
Another common error is for a debt to remain on the credit report for more than 7 years. This is a problem with collection agencies. Collection agencies tend to report disputed matters from the date they acquired the account which can be years after the date the debt went delinquent.
It is also possible that there will be matters on your credit report that do not belong to you, such as credit accounts that belong to someone with the same name. This can happen where you have a common name or where you are a Junior or a Senior.
You may show prior addresses or prior jobs that are not accurate. These should be corrected or removed.
Your Credit Reports Should Contain Accurate Information about your payment history on consumer loans and obligations
STATUTE OF LIMITATIONS VS CREDIT REPORTING TIMELINES:
The statute of limitations for credit card lawsuits is 4 years in California whereas the time-line for a debt to appear on your credit report is 7 years. The time-line for a judgment or bankruptcy to remain on your credit report is 10 years.
The Statute of Limitations sets a time-line for creditors to file lawsuits. In California, for credit cards and other consumer loans, the Statute of Limitations will be 4 years from the date of charge-off. The Statute of Limitations will be extended for another 4 years if you make any payments after the charge-off. If a creditor sues after the Statute of Limitations has expired you must defend the lawsuit or they will get an enforceable judgment against you. If the creditor sues and gets a judgment against you the judgment can be collected for 10-years and can be renewed for another 10-years. This can take the matter beyond any of the credit reporting time-lines. This is dangerous. It is possible for you to have collectible judgments against you without having any hints or clues in your credit report that would alert you to the problem.