Importance of credit reports

Are there documents in your life that provide you with identity, security, and even a reputation? Tax returns, driving records, employment references, and credit reports are examples of documents that allow you to prove to others who you are, what you do, and things you are entitled to. If one of these records is incorrect or missing you can run into many problems trying to conduct even the simplest everyday activities.

Perhaps you have seen the increasing number of articles in the media regarding the importance of correct and accurate credit reports? In the tougher economy we are faced with, lenders have made your credit report a critical factor in interest rates and approvals for things like a car, house, refinance, or personal loan. That has brought credit repair companies to the forefront.

Unfortunately, there are a few companies in the mix that make promises that are untrue or impossible to complete. The Federal Trade Commission recently reported of a company promising customers to remove negative information from credit reports, even if it was accurate and current, which is a violation of the FTC Act and the Credit Repair Organizations Act. Additionally, they guaranteed customers would see results in 60 days. The FTC made the announcement that they had ordered the company to stop making these and other promises.

The FTC went on to remind consumers that it is possible to get your credit report and arrange the removal or correction of wrong information for free. Additionally, many people will see an improvement in their credit report and score simply by making timely payments on debt and following other positive credit behaviors on their own. There is no need to pay someone for that.

One important piece of advice is to keep records of your financial affairs. In the event of trouble you will quickly find out that your memory is not as good as you think and your word is not as acceptable as you wish. Records in the form of receipts, cancelled checks, pictures, signed documents and contracts, and emails are excellent ways to prove your point. These records will be very helpful in showing the three credit bureaus that they should correct wrong or outdated information on your credit report. The FTC article also provides information on how to get your free credit report.