Credit laws such as the Fair Credit Reporting Act protects your credit history and can help fix or repair your credit records on file with national credit bureaus and reporting agencies.

Sometimes it seems you have to have credit to get credit! Some lenders only look at your salary and job and other financial information on your loan application but most will look at your credit report and score before deciding whether to grant you a loan.

Creditors want to know your track record in handling debt; how reliable you are based on your payment history. They use the records kept by credit bureaus or credit reporting agencies (business that collect and store information about borrowers). These records include the amount of debt you have and how faithfully you've paid it back and how high (or low) a score you have earned.

1. Building Up a Good Record
2. What Laws Apply?
3. Credit Histories for Women
4. Keeping Up Credit Records
5. Free Credit Reports

up 1. Building Up a Good Record

Here are several ways you can begin to build up a good history:

-- Open a checking account or a savings account, or both. These do not begin your file, but may be checked as evidence that you have money and know how to manage it. Cancelled checks can be used to show you pay utility bills or rent regularly, a sign of reliability.

-- Apply for a department store card. Repaying store card bills on time is a plus in your history.

-- Ask whether you may deposit funds with a financial institution to serve as collateral for a credit card; some institutions will issue a card with a limit usually no greater than the amount on deposit.

-- If you're new in town, write for a summary of any credit record kept by a bureau in your former town. (Ask the bank or department store in your old hometown for the name of the agency it reports to.)

-- If you don't qualify on your own offer to have someone co-sign your application.

-- If you're turned down, find out why and try to clear up any misunderstandings.

up 2. Laws That Apply?

The following laws can help you start your credit history and keep your records accurate:

The Equal Credit Opportunity Act gives women a way to start their own history and identity.

The Fair Credit Reporting Act sets up a procedure for correcting mistakes on your records.

up 3. Credit Histories for Women

Under the Equal Credit Opportunity Act, (ECOP) reports to credit bureaus must be made in the names of both husband and wife if both use an account or are responsible for repaying the debt.

Some women who are divorced or widowed might not have separate histories because in the past accounts were listed in their husband's name only. But they can still benefit from this record. Under the ECOP, creditors must consider the history of accounts women who have held joint accounts with their husbands.

Lenders must also look at the record of any account held only in the husband's name if a woman can show it also reflects her own creditworthiness. If the record is unfavorable--if an ex-husband was a bad risk--she can try to show that the record does not reflect her own reputation.

Remember that a wife may also open her own account.

Here's an example:

Mary Jones, when married to John Jones, always paid their bills on time and from their joint checking account. But the card was issued in John's name, and the credit bureau kept all records in John's name. Now Mary is a widow and wants to take out a new card, but she's told she has no history. To benefit from the good record already on the books in John's name, Mary should point out that she handled all accounts properly when she was married and that bills were paid by checks from their joint checking account.

up 4. Keeping Good Records

Mistakes on your credit record--sometimes mistaken identities--can cloud your future. Your rating is important, so be sure CRA records are complete and accurate.

The FCRA says that you must be told what's in your file and have errors corrected.

Negative Information. If a lender refuses you credit because of unfavorable information in your report, you have a right to the name and address of the agency that keeps your report. Then, you may either request information from the bureau by mail or in person. You will not get an exact copy of the file, but you will at least learn what's in the report. The law also says that the bureau must help you interpret the data--because it's raw data that takes experience to analyze. If you're questioning a loan refusal made within the past 30 days, the bureau is not allowed to charge a fee for giving you information.

Any error that you find must be investigated by the credit bureau with the creditor who supplied the data. The bureau will remove from your file any errors the creditor admits are wrong. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.

Old Information. Sometimes credit information is too old to give a good picture of your financial reputation. There is a limit on how long certain kinds of information may be kept in your file:

Bankruptcies must be taken off your records after 10 years.

Suits and judgments, tax liens, arrest records, and most other kinds of unfavorable information must be dropped after 7 years.

Your record may not be given to anyone who does not have a legitimate business need for it. Stores to which you are applying for credit or prospective employers may examine your record; curious neighbors may not.

If you've fallen behind on your bills, especially credit cards, don't panic. You may have several good options available to you. Your success starts by assessing your current situation and finding a trusted service provider that is licensed in your state.
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