CREDIT CENTER
•	Credit Basics > What is credit history? > Why your credit history is important > Understanding your credit report > What is the Fair Credit Reporting Act? > Am I eligible for a free credit report? > Glossary of Credit and Credit Related Terms	•	Credit Management > How often should I check my credit report? > Where can I get a copy of my credit report? > How do I dispute inaccurate information? > How can I improve my creditworthiness? > How do I build a credit history & establish credit? > Why aren't my spouse's accounts on my credit report? > What to do if your credit requests are turned down > What do the codes on my credit report mean?
•	The Real Deal on Credit Bureaus > What exactly is a Credit Bureau? > How do the Credit Bureaus obtain information? > How long do credit bureaus keep my credit info? > What is ChexSystems? > What is the Fair Credit Reporting Act?	•	Credit Report Definitions > What is an installment account? > What is a revolving account? > What is a public record? > What is an inquiry?
•	Credit Scoring > What is credit scoring? > What factors influence my credit score? > How does my credit score affect me? > What is a "good" credit score? > How is a credit scoring model developed?	•	Credit Fraud > Why should I be concerned about credit fraud? > How do I deal with credit fraud?

What is credit history?
"Credit History" is the history of how you have handled credit in the past. Your credit report keeps track of your payments on credit cards, installment loans, and other credit accounts. It answers questions like: Do you pay on time? Do you pay late? Do you pay slow? And more. It is your financial track record.

Why your credit history is important
Although creditors usually look at a number of things when they decide whether to give credit, most creditors focus mostly on your credit history. To learn how you have handled credit in the past, most creditors obtain a report from your local Credit Bureau. Credit Bureaus gather and sell credit information about consumers and are a primary, trusted source of information about your credit history. Your Credit Bureau report is based on information supplied over time by your creditors. It also provides information on where you live and work and may note other matters of "Public Record" such as judgments or bankruptcies. Your report records payments you have made on credit cards, installment loans, and other credit accounts and helps creditors predict whether you are likely to be a good credit risk. A history of timely credit payments helps you get additional credit.

Some creditors don't want to grant credit to consumers who have not established a "track record" with other creditors first. Plus, many creditors will not extend credit to consumers with a history of delinquent payments, repossession, judgments, or bankruptcy. If you are in either situation, beware of ads that promise you "instant credit" or "a major credit card regardless of your lack of credit history or your past credit record." The fact is that all legitimate creditors want to know whether you are likely to be a good credit risk. Whether you get credit will depend on whether your qualifications meet the creditor's standards. No one can guarantee you credit in advance.

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Understanding your credit report
Credit reports are playing a much bigger role in our financial lives than ever before. It is also important to know that recent studies prove that up to a quarter of all credit reports contain errors. So, you should keep tabs on what your credit report says about you.

No longer are the reports used just for deciding something like the interest rate on a loan. Today, some employers check them to screen job applicants and some insurance companies use credit scores in figuring out policies, a controversial practice.

There are three major Credit Bureaus. They are Experian, Equifax, TransUnion, and they compile information about your credit history from merchants and lenders. Negative information does not always show up on all three bureaus. It is important to keep in mind that just because one bureau reports one negative item, does not mean the others will show the same. In this section, we tell you more about Credit Bureaus and the role they play in tracking your credit history, and provide you tips on making sure your reports are accurate.

What is the Fair Credit Reporting Act?
The FCRA (Fair Credit Reporting Act) was created to encourage accuracy and ensure the privacy of the information used in consumer reports.

Businesses that supply information about you to CRAs and those that use consumer reports also have responsibilities under the law.

The FCRA is enforced by the Federal Trade Commission. For further details, you can find the complete text of the FCRA on the Federal Trade Commission's web site: http://www.ftc.gov/os/statutes/fcra.htm.

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Am I eligible for a free credit report?
You are eligible to receive a free copy of your credit report if:

• You have been denied credit, insurance, or employment within the past sixty (60) days because of your credit history.
• You can certify in writing that you are unemployed and intend to apply for employment in the 60-day period beginning on the date in which you made the certification.
• You are a recipient of public welfare assistance or have reason to believe that your file at the agency contains inaccurate information due to fraud.

If you are a resident of Colorado, Massachusetts, Maryland, New Jersey, or Vermont, you may receive one free copy of your credit report each year from the Credit Bureaus. If you are a resident of Georgia, you may receive two free copies of your credit report each year from the Credit Bureaus.

Illinois law, 815ILCS505/2B.2 (Solicitations Regarding Records): MANY GOVERNMENT RECORDS ARE AVAILABLE FREE OR AT A NOMINAL COST FROM GOVERNMENT AGENCIES. CREDIT REPORTING AGENCIES ARE REQUIRED BY LAW TO GIVE YOU A COPY OF YOUR CREDIT RECORD UPON REQUEST, AT NO CHARGE OR FOR A NOMINAL FEE.

• To obtain a copy of your credit report from Experian:
Mail request to: P.O. Box 2002, Allen, TX 75013 Or call toll-free (888) Experian (888-397-3742)

• To obtain a copy of your credit report from Equifax:
Mail request to: PO Box 740241, Atlanta, GA 30374 Or call toll-free (800) 685-1111

• To obtain a copy of your credit report from TransUnion:
Mail request to: 2 Baldwin Place, PO Box 1000, Chester, PA 19022 Or call toll-free (800) 888-4213

What exactly is a Credit Bureau?
A Credit Bureau, or credit repository, is an agency that gathers information about consumers' credit histories. Your credit history includes information about your identity, your payment habits, and your "Public Record." Credit Bureaus sell credit reports to credit grantors, such as banks, finance companies, and retailers. Credit grantors use credit reports to determine whether or not a potential borrower is creditworthy.

There are three major Credit Bureaus in the United States: Experian, Equifax, and Trans Union. These three bureaus provide nationwide coverage of consumer credit information.

How do Credit Bureaus obtain information?
Credit Bureaus get identification and credit information from credit grantors, such as banks, retailers, and collection agencies. Bureaus get money-related "Public Record" information directly from the court systems.

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How long do Credit Bureaus keep my credit information?

• The Credit Bureaus keep your personal credit history for a period of about ten years.
• Closed or Inactive Accounts — 10 years from the date of last activity.
• Derogatory Accounts — 7 years from the date of original delinquency.
• Public Records — 7 years from the date of payment or indefinitely if the Public Record is an unpaid tax lien. Chapter 7 Bankruptcies — 10 years from date filed

What is ChexSystems?
ChexSystems keeps a database of people who have a bad track record with one or more banks. Banks use ChexSystems to review your banking history. If you have a negative listing in the ChexSystems database, it can be very difficult to open a new account — checking, savings, or other account — often taking as long as 5 years.

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What is the Fair Credit Reporting Act?
The FCRA (Fair Credit Reporting Act) was created to encourage accuracy and ensure the privacy of the information used in consumer reports.

Businesses that supply information about you to CRAs and those that use consumer reports also have responsibilities under the law.

The FCRA is enforced by the Federal Trade Commission. For further details, you can find the complete text of the FCRA on the Federal Trade Commission's web site: http://www.ftc.gov/Os/statutes/fcra.htm.

What is credit scoring?
Credit scoring, simply put, is a mathematical analysis that uses an equation to turn your credit history into a single number, or score. In general, the score evaluates how many accounts you hold, your repayment histories for certain types of loans or lines of credit, how often you have applied for credit, length of employment and other traits. From there, a numerical score is produced, and this is attached to your credit report.

What factors influence my credit score?
Various factors determine your credit score, including the following:

• Payment history
• Outstanding debt
• Length of credit history
• Severity and frequency of derogatory credit information such as
bankruptcies, charge-offs, and collections
• The amount of credit used compared to the credit available

How does my credit score affect me?
Your credit score is an important indicator of your financial health. Lenders use your credit score to determine:

• Whether or not you are a good candidate for a loan
• What type of interest rate you will pay

While your credit score is a key determinant of your creditworthiness, lenders also examine the information on your credit report and your loan application. Regularly checking your credit report enables you to:

• Have the most up-to-date information in your credit history
• Correct any inaccuracies, to make sure that your credit data is a true picture of your credit record and increasing your chances of receiving credit under the best possible terms

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What is a "good" credit score?
There are several types of credit scores available. Usually, the higher the score, the better. Each lender decides what credit score range it considers to be a good credit risk or a poor credit risk. For this reason, the lender is the best source to explain what your credit score means in relation to the final credit decision. After all, they determine the standards used to extend credit. The credit score is only one piece of information evaluated by lenders.

How is a credit scoring model developed?
A lender creates a credit scoring model by using several criteria:

• Selecting a large sampling of customers
• Analyzing the data in their credit reports to determine which factors relate to creditworthiness
• Assigning a rank or priority to each of the factors, based on how accurately it might predict who will repay their loan on time.

How often should I check my credit report?
Many financial experts agree that you should check your credit report at least once a month. Creditors generally send updates to the Credit Bureaus once every month. Therefore, your account information should be updated once a month as well. If you are expecting an important change in one or more of your accounts, or if you are closely monitoring your credit history, you may want to check your credit report more often.

All creditors do not send updates to the bureaus on the same day. The Credit Bureaus are constantly receiving updates. There is no easy way to tell exactly when a creditor will send new information to the bureaus, or when the bureaus will update their databases. However, it is common for the same creditor to update records on the same day of each month. Thus, it is smart to choose the same day each month to check your credit report.

Where can I get a copy of my credit report?
How much does it cost? It is important that you obtain and review a copy of your credit report from each of the three major Bureaus once a year to make sure your information is accurate. Each agency charges a service fee that varies from company to company.
Experian ($14.95)
TransUnion ($12.95)
Equifax ($9.00)
3 in One Credit Report (all three agencies in one report) ($29.85)

All three reporting agencies collect information and all three may be looked at by creditors

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How do I dispute inaccurate information on my credit report? You have the right to dispute any misinformation on your credit report. You should begin the dispute process by contacting the creditor responsible for the inaccuracy. The contact information for each of your creditors is listed at the end of your credit report.

You can also dispute inaccurate information directly with the Credit Bureaus.

How can I improve my creditworthiness?
By observing the following guidelines, you can gradually boost your creditworthiness:

• Pay your bills on time. Prove that you are a reliable and consistent consumer.
• Check your credit report regularly and dispute inaccuracies. Don't let your creditworthiness be lowered by inaccurate information.
• Watch your debt. Keep your account balances below 75% of your available credit.
• Watch your available credit. If you have multiple accounts, all with high credit limits, lenders may conclude that your access to excessive unused credit could result in too much debt.
• Avoid excessive inquiries. Inquiries mean that you have been seeking credit with various credit grantors, resulting in multiple requests for your credit report. Creditors may view too many inquiries as a sign that you are experiencing financial difficulties.

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How do I build a credit history and establish credit?

New credit
Building a good credit history is important. If you have no reported credit history, it may take time to establish your first credit account. This problem affects young people just beginning careers as well as older people who have never used credit. It also affects divorced or widowed women who shared credit accounts that were reported only in the husband's name. If you do not know what is in your credit file, check with your local Credit Bureaus. Most cities have two or three Credit Bureaus, which are listed under "Credit" or "Credit Reporting Agencies" in the Yellow Pages. For a small fee, they will tell you what information is in your file and may give you a copy of your credit report.

If you do not have a credit history, you should begin to build one. If you have a steady income and have lived in the same area for at least a year, try applying for credit with a local business, such as a department store. Or you might borrow a small amount from your credit union or the bank where you have checking and savings accounts. A local bank or department store may approve your credit application even if you do not meet the standards of larger creditors. Before you apply for credit, ask whether the creditor reports credit history information to Credit Bureaus serving your area. Most creditors do, but some do not. If possible, you should try to get credit that will be reported. This builds your credit history.

Your own credit
If you have had credit before under a different name or in a different location and it is not reported in your file, ask the Credit Bureau to include it. If you shared accounts with a former spouse, ask the Credit Bureau to list these accounts under your name as well. Although Credit Bureaus are not required to add new accounts to your file, many will do so for a small fee. Finally, if you presently share in the use of a credit account with your spouse, ask the creditor to report it under both names.

Creditors don't have to report any account history information to Credit Bureaus. If a creditor does report on an account, however, and if both spouses are permitted to use the account or are contractually liable for its repayment, under the Equal Credit Opportunity Act, you can require the creditor to report the information under both names. When contacting your creditor or Credit Bureau, do so in writing and include relevant information, such as account numbers, to help speed the process. As with all important business communications, keep a copy of what you send.

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Why aren't my spouse's accounts on my credit report?
The Credit Bureaus maintain credit files on individuals, so your credit report contains payment information on credit accounts that are in your name only. This is why your credit report is separate and unique from that of your spouse.

What to do if your credit requests are turned down
If you are rejected for credit, find out why. There may be reasons other than lack of credit history. Your income may not meet the creditor's minimum requirement or you may not have worked at your current job long enough. Time may resolve such problems. You could wait for a salary increase and then reapply, or simply apply to a different creditor. However, it is best to wait at least 6 months before making each new application. Credit Bureaus record each inquiry about you. Some creditors may deny your application if they think you are trying to open too many new accounts too quickly.

If you still cannot get credit, you may wish to ask a person with an established credit history to act as your co-signer. Because a cosigner promises to pay if you don't, this can substantially improve your chances of getting credit. Once you have repaid the debt, try again to get credit on your own.

You need a steady work record and continued residence at the same address. If you do not have a checking account, open one and be careful not to bounce checks. You may apply for credit at a local department store or credit union. You might also consider a secured credit card, which requires you to deposit money as security for the charges you make on the card.

To learn more about Secured Credit Cards, click here.

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What do the codes on my credit report mean?
The most common of the codes used to describe an accounts condition are as follows:

On the far right hand side of the report is the consumer payment history for the past 25 months. These codes reflect the monthly status of an account and are displayed for balance reporting loans. Collections and charge-offs are not graded. These codes stand for:

What is an installment account?
Installment Accounts have fixed terms with regular payments. If you've ever had a car loan, student loan, home loan, or personal loan, you know what we're talking about. Let's say your car payment is $300 per month — this means that each month you pay the $300 installment.

Facts about Installment Accounts:

• You owe a certain amount of money.
• You have to pay back a set amount of that money each month and this set amount does not change.
• You also have a certain amount of time to pay off the loan

What is a revolving account?
Revolving Accounts have open terms and varying payments. This means that your monthly payments will vary depending on the balance of the account. Examples of revolving accounts include all major credit cards and credit cards from department stores.

Facts about Revolving Accounts:

• When you open a revolving account, such as a credit card account, you are given a maximum amount that you can charge — a limit.
• It's up to you how much of your limit you will spend.
• The amount that you owe will change each month, depending on how much of your limit you have charged.

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What is a Public Record?
Not all personal information is private — including "Public Records." All federal, state, and county courts make certain information public. This includes information about legal matters affecting your credit.

It works like this: the courts record legal information, make it public, put it on your credit report, and it becomes a "Public Record."

The most common types of Public Records include judgments against you in civil actions, state or federal tax liens, or bankruptcies. Public Records stay on your credit report for seven years. If the Public Record is a Chapter 7 Bankruptcy, it will stay on your credit report for ten years. If you have a Public Record on your credit report, you can take steps to ensure that you receive credit under the best possible terms. The most important step is to make timely payments on your Public Records.

Set a goal for yourself: Aim to have your Public Records paid-in-full by a certain number of months or years. By sticking to your payment plan, you'll prove to potential creditors that you are a creditworthy consumer.

What is an inquiry?
An inquiry occurs when another party requests a copy of your credit report. These inquiries can be made by credit-granting organizations, such as banks and retail stores, when you are applying for credit. Other inquiries, from requestors such as insurance companies, potential employers, or rental housing agencies, can be made after you have given the requestor your consent. The requestor's name will appear on your credit report, allowing you to monitor who looked at your credit history.

Why should I be concerned about credit fraud?
Credit fraud is a growing problem, and it affects each and every one of us. When a credit card thief purchases goods with a stolen card, it is the creditor that has to cover that cost. Creditors cover this loss by charging cardholders higher interest rates.

Credit card fraud goes beyond the use of a stolen credit card. A thief can use your account numbers even when your credit cards are safely in your wallet. You may not realize that fraudulent charges are being racked up on your card until you notice charges, that you did not make, on your monthly statement.

How do I deal with credit fraud?
If fraud is suspected, you should contact the Credit Bureaus immediately (see contact information below). The bureaus have an established process that will help identify and stop fraudulent activities. In the case of fraud detection, you must inform your creditors and request that they immediately halt all incoming transactions. Have them put a fraud alert on your file, which will aid in preventing new credit accounts from being opened without your express permission.

• To file a fraud report with Experian contact:
Experian's National Consumer Assistance
P.O. Box 1017
Allen, TX 75013
Phone: (888) 397-3742

• To file a fraud report with Equifax contact:
Equifax Fraud Division
P.O. Box 740250
Atlanta, GA 30374
Phone: (800) 525-6285

• To file a fraud report with TransUnion contact:
TransUnion Victim Assistance Department
P.O. Box 6790
Fullerton, CA 92834
Phone: (800) 680-7289

• Freeze fraudulent accounts
Contact the appropriate creditors, banks, phone companies, and utility companies and have them freeze the accounts. You'll probably be liable for only $50 of the fraudulent charges, but different issuers have different policies. Most creditors promptly issue replacement cards with new account numbers.

You may also need to contact one or more of the following government bodies, each of which will inform you of the necessary procedures.

• To file a fraud report with Government agencies contact:
Federal Trade Commission: (877) 438-4338
U.S. Postal Inspection Service: http://www.usps.com/postalinspectors
Social Security Administration's Fraud Hotline: (800) 269-0271

• Mail fraud
If you suspect that someone has changed your address with the post office or used the mail to commit identity theft, notify the US Postal Inspector.

• Fraud involving your driver's license number
If your driver's license number has been used to open accounts or verify checks, contact your state's Department of Motor Vehicles.

• Bankruptcy filed using your name
If someone filed for bankruptcy using your name, write to the U.S. Trustee in the region where the bankruptcy was filed. A listing of the U.S. Trustee Program's Regions can be found at www.usdoj.gov/ust, or look in the blue pages of your phone book under "US Government: Bankruptcy Administration". Your letter should describe the situation and provide proof of your identity.

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