Understanding Credit Files

If you are in debt and bothered daily by creditors, you may want to understand your credit files to repair your credit. If you are behind on payments, your credit score takes a hit and often you can’t get a loan. There are exceptions, but if you can get a loan or credit card, you will pay high-interest rates. Your credit file determines your faith in life. If your credit file has a low score, most landlords, lenders, or vendors will turn you down when you apply for a loan. Credit files are often found in computer systems maintained by credit bureaus. If your credit file indicates that you are a low risk, you will most likely get a loan, an apartment, a credit card, or whatever you apply for. Credit scores are a ‘numerical’ system that determines a person’s credit rating and score. Credit scores generally range from ‘300 to 850’ otherwise scores are higher if a person has an outstanding credit rate. If you apply for a loan and lenders cannot find your credit file, it is often seen as a mishap. This means you have not established a credit history and no one can know if you are a good or bad risk. That’s why it’s important to establish credit at an early age. If you apply for department store cards, credit cards, gas cards, or other items that offer you credit, then you are well on your way to establishing a credit history and your file will be on record. The problem with applying for credit cards or loans, or any type of credit, is that when we start, our parents are often co-signers. This means that if we miss payments, our parents are obligated to pay the debts. The truth is that when we apply for a job, apply for an apartment or take out an insurance policy, we are establishing credit. Your credit files are often stored at TransUnion, Equifax, and Experian. The law protects us to some extent when it comes to credit repair. Understanding all the legalities, as well as how our credit file affects us, is important to repairing our credit history. Credit bureaus are coordinated and monitored by the Federal Trade Commission by the requirements of the Federal Fair Credit Reporting Act (FCRA) and follow state laws. If you have credit files with inconsistencies, the Fair Credit Reporting Act protects you in that it requires credit bureaus to remove or make obsolete information in your credit file. This protects you if you are a victim of identity theft or any other false accusations made against you. The laws require credit bureaus to list accuracies in credit files by collecting the appropriate information against you or on your behalf. The laws protect you in that it regulates the credit bureaus by allowing them to only list negative reports against you for a limited time. The laws also regulate who can see your credit files. If you are applying for a loan, a license, public assistance, insurance, landlords and courts can request your credit files without your consent. However, if you are applying for a job under certain circumstances, employers will need a written authorization form from you. Utilities are subject to the law and these providers cannot deny you services even if you have bad credit. As you can see, there is a wide range of services that can check your credit file. The downside is that each time your credit is checked, points go on your files. The more points added to your credit file, the more it will affect your credit, so be careful and only apply for what you need. If you have bad credit and are trying to repair your credit, then you should be sure to request copies of your credit files, understand your score on your files, and if you suspect you are a risk, it is best to apply for loans or credit cards after you have cleaned up your credit report.

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