CORRECTING ERRORS ON A CREDIT REPORT -

A report to the US Congress stated that as many as 40% of individual credit histories
contain errors of some kind. A single missed keystroke by a clerk, can assign a
delinquent account to the wrong file.  Corrected information submitted by an
individual can be misrouted or entered erroneously.  For whatever reason we must
be vigilant about the accuracy of our credit reports.  We need to know what goes
into them, how to read them,how they are used and how to challenge or correct
errors when it happens.

How do I correct Errors?

Send a copy of your credit report to all three agencies along with a detailed letter,
pointing out each "trade line" (debt)your questioning.  If you have proof of
payment, or proof of timely payment, include a copy(save your original receipt) of
the proof, if it is a joint account make sure you include both Social Security
numbers, and request that they delete the adverse rating/reporting for the
"tradeline" in question.  Always send by certified mail, since that will be your record
that the credit agency has received your dispute.  

The credit agencies have 30 days to respond to your dispute and they must give you
the written results.  If the investigation does not resolve your dispute, have the
credit bureau include your version of the dispute in your file and in future reports.

If the reporting agency cannot verify a disputed entry, they must delete it.  If the
information is incomplete, they must complete it.  For example, if you were
temporarily delinquent on an account, and then brought it current and the bureau's
report does not reflect that, they must correct your record.  Also, if your file should
show someone else's account(this sometimes happens with a "Junior-Senior"
relationship or with common names) they agency must delete it.


CONSUMER RIGHTS -

A good credit rating is very important. Businesses inspect your credit history when
they evaluate your applications for credit, insurance, employment, mortgages and
leases. Based on your credit payment history, businesses may choose to grant or
deny credit, provided you receive fair and equal treatment. Sometimes, things
happen that can cause credit problems: a temporary loss of income, an illness, even
a computer error. Solving credit problems may take time and patience, but it
doesn't have to be an ordeal.

The Federal Trade Commission (FTC) enforces credit laws that protect your right to
obtain, use, and maintain credit. These laws do not guarantee that everyone will
receive credit. Instead, the credit laws protect your rights by requiring businesses
to give all consumers a fair and equal opportunity to receive credit and to resolve
disputes over credit errors. This document explains your rights under these laws
and offers practical tips to help you solve credit problems.


CO-SIGNING A LOAN -

If a relative or friend asks you to co-sign a loan, make sure you understand what
co-signing involves.  You are being asked to guarantee the debt, so think carefully
before you do:

1. If the borrower does not pay the debt, you will have to, so make sure you want
to accept the responsibility.

2. You may have to pay up to the full amount of the debt if the borrower does not
pay and you may also have to pay late fees or collection costs.

3. When you take the responsibility of co-signing for someone, your credit report
will be affected if the borrower does not pay on time or at all.  The co-signed loan
or credit account will be reported under your social security number, showing:
on-time pay, late pay, collections, etc., whatever the status is of the borrower's
repayment or non repayment ability.




Individual Account
Your income, assets, and credit history are considered by the creditor. Whether
you are married or single, you alone are responsible for paying off the debt. The
account will appear on your credit report, and may appear on the credit report of
any "authorized" user. However, if you live in a community property state, you and
your spouse may be responsible for debts incurred during the marriage, and the
individual debts of one spouse may appear on the credit report of the other.

Advantages/Disadvantages: If you're not employed outside the home, it may be
difficult to demonstrate a strong financial picture without your spouse's income. If
you open an account in your name and are responsible, no one can negatively affect
your credit record.

Joint Account
Your and your spouse's income, financial assets and credit history are considerations
for a joint account. No matter who handles the household bills, you and your
spouse are responsible for seeing that debts are paid. A creditor who reports the
credit history of a joint account to credit bureaus must report it in both names (if
the account was opened after June 1, 1977).

Advantages/Disadvantages: An application combining the financial resources of two
people may present a stronger case to a creditor who is granting a loan or credit
card. When two people apply together for the credit, each is responsible for the
debt. This is true even if a divorce decree assigns separate debt obligations to each
spouse. Former spouses who run up bills and don't pay them can hurt their
ex-partner's credit history on jointly held accounts.

Account "Users"
If you open an individual account, you may authorize another person to use it. If
you name your spouse as the authorized user, a creditor who reports the credit
history to a credit bureau must report it in your spouse's name as well as yours (if
the account was opened after June 1, 1977). A creditor may report the credit
history in the name of any other authorized user.

Advantages/Disadvantages: User accounts often are opened for convenience. They
benefit people who might not qualify for credit on their own, such as students or
homemakers. While these people may use the account, you, not they, are
contractually liable for paying the debt.


CREDIT COUNSELING -

There are also a lot of advertisements from credit counseling companies, that offer
to consolidate your debt for you, and all you have to do is make one lower monthly
payment to them. While this sounds very enticing because it relieves the stress of
having to worry about making many different bills out, and after all you could lump
them into one lower payment, there are concerns with this type of assistance.

The problem with this is that although you may make your "consolidated" payment
to them every month on time, there is no guarantee that they in turn forward the
payment to all of your creditors on time.  The result could be late pays reflected on
your credit report.  

The single most negative reason for you to engage in credit counseling is that the
debt could be reflected on your credit report as such.  When it comes to securing
financing for a home mortgage loan, this would be viewed negatively not positively
from an underwriting standpoint of obtaining an approval from a lender.  
Credit Library
Benchmark Mortgage | 1750 E. Golf Rd., Suite 310 | Schaumburg. IL 60173
Illinois Residential Mortgage Licensee   
If you are unsure of your credit profile or simply need professional advice, contact
me and I will give you a honest straight forward answer and common sense strategy
for getting back on track with your credit.
The Mortgage Source
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From Deb Sineni