Good credit is a vital aspect of life. At one point or another we all need credit, unless your an off the grid mountain man that is. Good credit allows us better interest rates on loans and credit, landlords for good properties use credit reports to decide weather to rent to you or not, and many jobs in today’s day and age also make use of your credit report. You also need a good credit score to obtain a personal loan. The better your credit score the better interest rates you will receive for a personal loan. Personal loans tend to have higher interest rates than car loans or mortgages. With so much riding on your three credit reports you should take steps to make sure that your credit report reflects the best possible score.
The first step in building a good credit score is to see what the credit reporting agencies have to say about you. You can pull your credit reports from annualcreditreport.com. You should verify that every piece of information on it is factual and correct. As much as 26 percent of all credit reports contain at least one nonfactual negative piece of information that impacts the persons credit score. By law You are entitled to one free copy of your credit report every year from all three credit reporting agencies. The three major ones are Experian, Equifax and TransUnion.
If you have any outstanding debts listed as late or non payment status you need to clean these up. These are known as derogatory items. Pay off any small balance debts and make payment arrangements or payment plans for large debts that you can pay off quickly. Do not just pay the debts off but also contact the creditor to let them know you intend to make the debt current and correct your past mistakes. This will help ensure that the payments you make towards your debt will be properly recorded on your credit report. You can provide to the reporting agencies up to a 100 word statement relating to any derogatory item on your credit report to explain any extenuating circumstances and by law it must be included on any credit report which is distributed to third parties.
Negative items can remain on your credit report for a total of 7 years from the date of last activity on the account. Each passing year the impact of the derogatory items fades in regard to their impact on your credit score. You can while cleaning up any past debts try and open some small lines of new credit. If you got his route it is vital that you never ever be late with a payment and keep current with your payments. This will help you to re-establish your credit or if new to credit to build it up. You should however keep applications for credit to a minimum, as every time you apply for credit an inquiry appears on your credit report, and these inquiries reduce your credit score for a time, usually about 6 months. If you do get a new line of credit try not to use more than 30% of your credit limit as using any more than 30% can negatively impact your credit score.
Tammie asked for help when her creditor discussed her credit history with her husband:
I was late paying one of my credit cards. The creditor phoned my husband and gave him all the information on about my credit card including the balance and my payment history. The creditor even made payment arrangements with him.
My husband’s name is not on my account at all. I am the only one with access to the account. When I called the creditor, they explained that they had the right to discuss this with my husband because I live in Pennsylvania and because I was late in paying on the account. Is this true?
This sounds like a debt collector, and not a creditor. Assuming Tammie’s husband was not a co-signor or joint card holder, debt collectors may NOT speak to her husband or anyone else in her family about the status of the debt.
Whether you live in a community property state like California, or an equitable distribution state like Pennsylvania, debt collectors are not permitted to contact your spouse to discuss the terms of your account, or negotiate the payment of your individual credit card account. Collectors may contact other people, one time only, to find out where you live, work and what your phone number is, but they are not permitted to attempt to discuss your debt or collect it from anyone who is not otherwise legally obligated to pay your debt. (Fair Debt Collection Practices Act – 15 U.S.C. §1692c(b).)
What should Tammie do:
• The Federal Trade Commission: The Federal Trade Commission works for consumers to prevent fraudulent, deceptive and abusive business practices. To file a complaint visit http://ftc.gov or call 1-877-FTC-HELP. (15 U.S.C. §1692l)
• File a complaint with her state’s office of Attorney General. Click here for the Attorney General’s office in your state where you can find on-line complaint forms, for filing complaints against collectors and creditors who violate the Federal Fair Debt Collection Practices Act and your state’s debt collection and creditor collection laws: http://www.fair-debt-collection.com/ag-complaint-forms.html
• She may wish to contact an attorney to help her sue the debt collector. If she does not have an attorney or cannot afford one, she can contact the Local Legal Services provider, or Lawyer Referral Service of the state, county or local bar association near her home.
Consumer protection is different in every state. The Fair Debt Collections Practices Act does not change the laws of any state debt collection practice unless that law conflicts with any part of the Act. If state law conflicts with the act, but provides better protection for you, then the state law applies. (15 U.S.C. §§ 1692a, n.) An attorney can advise you of your rights.
To learn more about your rights read Can Collectors contact my family, friends or work-place? Have a question about debt collectors? Do you have advice for Tammie ? Share your feedback in the comments section below Our editorial team is constantly searching for timely articles on consumer lending, online loans and saving money in 2015.