Thursday, October 20, 2011

Give Yourself Credit

I’m not sure exactly how my credit got screwed up, but somehow Experian included dozens of negative items on my credit report that did not belong to me. We discovered this when we refinanced our condo about a year and a half ago. Not wanting to delay the refinancing, we moved forward using only Ron’s credit, figuring we would clear up my issues later.

Time moved on, and I kept delaying the resolution to my credit issues. We don’t rely much on credit these days, so it hasn’t really caused a problem. Besides, when I researched how to resolve the issues, the process seemed so onerous. Supposedly I had to write a letter listing all the disputed items and explaining how they weren’t mine. The whole thing made me angry, so I stuck my head in the sand and tried to ignore it. But it kept niggling at the back of my consciousness as something that needed to be resolved.

We all need to work to maintain our good credit. It can too easily be adversely affected by our own laziness, rough spots in our financial life, mistakes on the part of credit bureaus or other individuals, or by identity theft. Once damaged, your credit can take months or even years to repair. Bad credit can keep you from obtaining a needed line of credit, a loan, a good interest rate on an approved loan, or even a job. If you rely on your spouse or partner’s credit, you must consider the situation you would be in if something happened to them and you were left on your own.

After giving myself the lecture above, I printed my free annual credit reports so I could reassess the situation and finally tackle the problem. Here’s what I learned in the process that may be helpful to you if you have never done this before:

1. is the ONLY authorized source for the free annual credit reports that are yours by law. There are other sites that will try to lure you to get “free” credit reports but try to confuse you and trick you into purchasing other services.

2. Once a year, you are entitled to get a free report from each of the three nationwide credit reporting companies: Experian, Equifax, and TransUnion. You need to check all three every year, as their results can differ. (My Experian report was awash with faulty information that did not appear on the other two reports.)

3. I went on Experian’s website to submit disputes to bad information. I didn’t get very far before I got error messages that directed me to call their 800 number for assistance. After a little VRU Hell, I got to a real person. When I described my issues, I was directed to a specialist, and we really started to get somewhere.

4. My report included negative information owned by people with other names and social security numbers! There was even a judgment against one by a civil court in Ohio. This person (or people) defaulted on tens of thousands of dollars of credit and bills. The specialist was pretty quick to recognize that this wasn’t consistent with my personal information, and started flagging the 50+ negative items for deletion from my credit report. She said, “Wow, this is really going to make a difference in your credit score.” Ya’ think? She told me that it would take a few days for the report to be reissued, and the link to login would be sent to me via email. For the next 90 days, my report has a fraud alert applied to protect me from the addition of new inconsistencies. This process took about a half hour on the phone, which I thought was pretty efficient for what we accomplished.

5. It may take a few months before my credit score catches up with my new, clean report. I’ll pay $7.95 to obtain the score, which is not included with a free credit report.

Going forward, I’m marking my calendar to ensure that I obtain my free credit reports every year. My financial advisor’s assistant had a good suggestion – obtain two of the reports every January, and “save” the third in case you need to check your credit later in the year.

It feels good to have resolved this issue. If you haven’t faced this foggy unknown, take charge, protect your financial health and give yourself credit.

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