Checking Your Credit Rating

WHEN you apply for a loan, the prospective lender will probably check your credit record. But how can you ensure that this all important record is fair and accurate?

Private credit bureaus are in the business of compiling the record of how promptly and fully you pay your bills. Then they sell this information to other companies when you apply to those companies for a loan, for an insurance policy or even for a job.

If you get turned down for credit, the firm that refused you must tell you the name of the credit bureau it used in making its decision. You then should contact that bureau and ask for a copy of your report. The bureau is required by law to tell you what is in your file. If you request the information within 30 days of your having been denied credit, the bureau will charge you no fee. Otherwise, fees run about $ 20.

You can challenge any information in your file. If the credit bureau cannot confirm the disputed information, it must delete the information. If you request it, the bureau also must send a revised copy of your report to any credit grantor that received the report in the last six months.

Even if the credit bureau finds that the information is valid, you can write an explanation for anything you may have done that is considered wrong. The credit bureau should then attach your explanation, or a clear summary of it, to your report. That way, anyone who receives your credit history will also get your side of the story.

But what if you have made some very late payments or other credit bloopers in the past? How soon can you start with a clean slate? Most of your mistakes will be removed from your record within seven years after they occurred. The only incident that can remain longer is bankruptcy.