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What is a credit report and why should I get one?

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How do credit reports work

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Credit reports are a detailed overview of your credit behavior. These include information that is useful for any lender when determining whether they should lend you money or not. Here is a brief outline to the content:

  • Personal information: such as name, SSN, birthdate, and employment history.
  • Credit Accounts: This section includes all the relevant information regarding your bank accounts, whether you have paid on time, credit limits, and the total amount due.
  • Credit Inquiries: When you apply for any loan, this process will appear on your credit report and helps evaluate your liquidity status.

Credit Bureaus

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There are three main credit bureaus in the US. These are Equifax, Experian, and TransUnion. They collect information from financial institutions and money lenders to store useful information on each person and company that has debt. When you apply for a loan, credit bureaus will file a summary of your credit history; this is the credit report. You will have an individual credit score with each of the credit bureaus, so when an error appears on your credit report you will need to discuss it with the specific credit bureau.

Disputing Errors

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If you found an error on your credit report, don’t panic, it happens. The first thing you should do is identify the credit report that contains the error. You should then write a letter explaining the error, try to substantiate it very well, and add evidence if you can.

Here are some helpful links that will help you:

Direct access to dispute section

Equifax – https://www.equifax.com/personal/credit-report-services/credit-dispute/

TransUnion – https://www.transunion.com/credit-disputes/dispute-your-credit

Experian – https://www.experian.com/disputes/main.html

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Daniel Quiroz

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