Clueless about Credit? Answers that everyone should have, in language all can understand! (Gregg Marcus)

Our senators and congressman have passed numerous laws and regulations regarding the collection of information about how consumers pay their bills, which is what credit reports are supposed to show, and the rules for sharing that very personal information. They have legislation like the Equal Credit Opportunity Act (ECOA) to make sure all Americans have access to credit and the Fair Credit Reporting Act (FCRA) that entitles all of us to receive a free copy of our credit report when we are turned down for credit because of information it contains and (FACTA) that requires Creditors to provide consumers whose credit reports are used for lending decisions of any kind to receive a copy of their credit scores and a list of possible reasons that affect the scores.

First things first - you were promised an explanation of exactly what a credit report is, and how the system of credit reporting works. Companies that offer credit, for transactions like auto loans, credit cards, store charge accounts and mortgages report the payment histories of their customers to credit bureaus. Banks, cellular phone companies, national chain stores and local merchants - any business which extends credit to its’ customers benefits by using this picture of how a person pays their bills over time when deciding whether or not to approve the credit request and how much to lend. These large credit bureaus, also known as credit agencies, share this information with businesses that pay for each report they access. Their names are Experian, Equifax, and Trans Union. These for profit companies sell access to their data bases to smaller credit companies which sell combined versions of the information held by all three.

Credit reports are run using your name, address, social security number, and possibly your date of birth as well. When you think about it, these are the same elements used in identity theft, the subject of a later installment in this series. Credit reports contain a history of your financed purchases and credit card and auto loan payment histories. They list when the account was opened, what the high credit limit has been, what the current balance is, what the current payment is and when the last payment was made in addition to whether or not the last two years of payments were made on time or not.

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Credit reports use public records to include lists of judgments, bankruptcies, foreclosures, tax liens and other negative credit events in your credit report.

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