Credit Matters

Every person presently in the United States is being affected by the recent credit crunch. Irrespective of any outstanding credit history, everyone will suffer the consequences of this credit crunch without any exception. Therefore timely monitoring of your credit reports is of great importance.

Financial institutions are looking for excuses to increase interest rates or decrease credit line. Any delays that you make in making payments can be used as an excuse by your creditors to increase your interest rates or lower your credit limit. It is, therefore, imperative that your credit report does not have any inconsistencies.

You may not realize that creditors often make mistakes when reporting to the credit bureaus. Mistakes have been made on reporting payment histories, loan amounts and personal information. One minor mistake could damage your credit report and your chances at getting a loan in the future.

The best defense is to check credit report often. You have a right to one free report annually from each of the three credit bureaus. This will allow you to view your true credit report, but will not give you access to your credit score.

Resolve any inconsistency in the credit report at the earliest. Establish contact at the first instant possible. Send a letter providing your contact information, dispute details, reasons for contesting and a request to correct the information. Online forms are also available.

When you send a letter to the credit bureau, you must include records that will prove your dispute. Include copies of statements or other documents and a copy of your credit report with the incorrect information circled. Send the letter certified mail with a return receipt request.

You must contact the creditor at once after you have contacted the credit bureau. This can be done by sending the copies of the same documents that you attached wit the letter to the credit bureau and a cover letter stating your dispute. You must also inform them that you have notified the credit bureau.

Monitoring of credit report is of great importance. Before making a large purchase, such as a home or car, subscribe to a credit monitoring service. By doing this you will be notified about any changes in your credit report of credit score.