NCCheck FAQ's

FAQs about the credit system

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1. What Is a Credit Bureau?

 

A credit bureau gathers, maintains, and sells information about consumers' credit histories. It collects information from banks, savings and loans, credit unions, finance companies, and retailers. The credit bureau stores this information in a database and sells it to companies in the form of credit reports. When you apply for a new credit or loan, the creditor buys your credit report and decides whether to grant you credit.

2. What Is a Credit Report and what information does it contain?

 

A consumer credit report is a document that contains information of an individual's credit payment history. A consumer credit report contains the following information:

  • Identifying data - name, address, social security number, date of birth, employers.
  • Credit tradelines - accounts from financial institutions and retailers, as well as other creditors.
  • Public records - bankruptcies, liens, and judgments.
  • Inquiries - recent requests for your credit report.
  • Credit score - may also be included as a risk measure.

3. What your Credit Score means?

 

Scores go from 375 to 900 points 375 being the worst and 900 the best.

Persons with scores above 650 will have no problem getting credit, and usually obtain very good conditions and rates; this high score indicates a very good credit behavior. A person with a score between 620 and 650 is considered a good prospect but usually has to supply extra information to the creditor. People with a score below 620 may be considered a greater risk. The process usually takes longer, and the conditions may be less attractive to the borrower.

4. What factors affect your credit score?

  • Pay Your Bills on Time - a person that pays back debts in a timely fashion.
  • Keep Your Debt Load Reasonable - If a large portion of your income each month is already committed to paying off other debt, the lender will wonder if you may have trouble paying back an additional loan.
  • Co-signing - The outstanding amount is considered your debt, even if the individual for whom you cosigned is paying all the bills. Give careful consideration before you cosign, even for someone you know will pay the debt; it does impact your credit.
  • Avoid Unnecessary Inquiries - Whenever you authorize a creditor, employer, or other business to check your credit report, an "inquiry" is added to the report itself. An inquiry usually stays on your credit report for two years. It's a good idea to minimize inquiries into your credit report, since a large number of inquiries occurring in a short period of time may be interpreted as a sign that you are either:
    • Applying for lots of credit because of financial difficulty.
    • Overextending yourself by taking on more debt than you can actually repay.
  • Eliminate Excess Unused Credit - Lots of available credit means you have the capability to overextend yourself in the future, even if you have not done so in the past. If you have thousands of dollars of unused credit available, you might spend it all the month after your loan goes through and suddenly have more debt than you can pay off.

5. What is the Fair Credit Reporting Act?

 

The Fair Credit Reporting Act guarantees that people's rights, fairness, and privacy of information are protected. To learn more about the law and your rights visit one of the following sites.

6. How do I correct inaccurate information on my credit report?

 

If you find inaccurate or erroneous information on your credit report, you have the right to dispute it. You may do so by contacting the creditor, who is then required to confirm and correct the information with the three national credit bureaus.

To expedite the correction process at the bureau level, you may ask for a letter from the creditor with the correct information to be reported and contact directly the bureaus at the following addresses and phone numbers:

Equifax
www.equifax.com
800.685.1111

Experian
www.experian.com
888-397-3742

TransUnion
www.transunion.com
800.888.4213

The bureaus may take up to 30 days to complete the changes.

7. How do I order a free copy of my credit report?

 

You have the right to a free credit report if you:

  • are the recipient of an adverse action (for example, denial of credit) due to information contained in the Consumer Report;
  • are unemployed;
  • are a recipient of public welfare assistance;
  • have inaccuracies in your credit Report due to fraud.

In addition, residents of the States of Massachusetts, Maryland, Colorado, New Jersey, and Vermont may also receive a free copy of their credit report once a year and residents of the State of Georgia may receive up to two (2) copies a year. These are called complementary copies. To receive your free copy, you should go directly to each of the Credit Bureaus.