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Lesson B: Credit Repair
If Your Turned Down for Credit
A creditor may make a decision to deny your credit application based on a variety of reasons. If at
least part of that decision was reliant on a credit bureau report, they must tell you this in writing
including the name and address of the credit bureau used in the decision making process.
You can then write to the credit bureau stating that you were denied credit, insurance, employment
(or whatever is appropriate) and that you want a copy of the report. If you request it within 60 days
after you were turned down for credit, (based on that bureau's report) by law the bureau must
provide a free report.
Getting a copy of your credit report
Late payments or missed payments can work against you the next time you want credit. Getting
turned down for credit could be the result of something on your credit bureau report.
You want to make sure that the information on file is complete and accurate. Statistics show that
over 75% of credit reports contain some type of error. More than half of the errors involved
personal information. To obtain a copy of your credit report, contact the three major credit bureaus:
Equifax
www.equifax.com
TransUnion
www.transunion.com
Experian
www.experian.com
Correcting Mistakes
If you find inaccuracies on your report, you'll want to be sure it's corrected. You can usually
find instructions for disputing those mistakes on the last page of the bureau report. It's a
good idea to have the proof as well (receipts and documents to back up your claim).
Credit Repair
It is not advisable to use credit repair agencies. Most of these companies have been found to not be
legitimate and have used deceptive or misleading practices. Many claim to be able to remove
accurate information from your credit report. The truth is no one can accomplish this. If the
information on your report is accurate, it will not be removed. The information reported can remain
for up to seven years with the following exceptions:
- A Chapter 7 or dismissed Chapter 13 bankruptcy will be reported for ten years.
- Information based on an employment application for a job with a salary of more than $20K
annually has no time limitation.
- Lawsuits or judgments can be reported for up to seven years or until the statute of limitations runs out, whichever is longer.
Exercise
Quiz
Click here to download a printable version
| 1. |
If someone is denied credit they are entitled to a free copy of their credit report within 60 days of denial. |
True/False |
| 2. |
25% of credit reports contain some type of error. |
True/False |
| 3. |
Paying bills late lowers the credit score. |
True/False |
| 4. |
Most credit repair agencies have been found to be legitimate. |
True/False |
| 5. |
All information on your credit report will remain for 10 years. |
True/False |
| 6. |
If a lender denies a credit application they must notify the consumer in writing expaining why they were denided. |
True/False |
| 7. |
If an employer denies employment based on information found in the credit report they are required to notify the consumer in writing explaining the reason for denial. |
True/False |
| 8. |
The Fair and Accurate Transactions Act entitles consumers to one free credit report from the three major credit reporting bureaus each year. |
True/False |
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BBB Rated A+! 