Free Yearly Credit Report

The holiday period of the year is usually accompanied with lot of fraudulent credit card cases, theft with regards to identification of a person. One needs to ensure that one keeps a check as well as track on his/her credit report. So then how do you go about this checking of credit reports. Let me explain this to you. One needs to check one’s credit report with regard to the following points:

• Any case of errors/ambiguity
• Any cases related to fraudulent entries/identification theft
• To enable one to avail of the best possible interest rate
• Since many lenders rely on credit score, need to update your report and maintain an accurate credit report.

Time when you need to check your credit report:

One is advised to check one’s credit report when one is absolutely sure of one’s credit records and you do not anticipate any major purchases in that particular year.

Always ensure an accurate credit report before you apply for a loan or a mortgage of a bank so that you have enough time in correcting and rectifying any errors, if any. An inaccurate report would be the reason why your request for loan could be rejected outright.

In case you have not been able to get a loan sanction from the credit report submitted by the credit bureau, then you have every right to ask for your free copy so as to find out the reasons behind the rejection of the loan by the bank or the lender.

You also need to check your credit repot in case you are a victim of identification theft.
In case you intend to clear your negative credit score and start afresh, you need to keep a check on your credit report.

How does one go about checking his or her credit report?

The 3 bureaus which are connected with the credit report are Equifax, Transunion and Experion. It is mandatory that you get your free credit report from either of the agencies annually. You could cross check the reports of all these 3 agencies because the reports do not normally tally with each other. You could check for discrepancies and errors if any and report the matter to these agencies.

Try and order the reports from these agencies giving a gap of 1 month in between, so that you have a correct picture of your credit score. Compare the reports thoroughly. There is this bureau which is the annual credit report.com site which gives a free credit report online. One can check one’s credit score without having to shell out extra dollars. There are other private agencies who do offer this service, for a fee but one is advised to be aware of such scams.

Another alternative to check out if there is any fraud is to order for a 3 in 1 report from Myfico.com. One is advised that one checks one’s credit report periodically so that you do not fall a prey to frauds and identity theft. You are also aware of any errors if any or wrong entries passed in the report. Even otherwise you need to be extra careful with regards to keeping a track on your credit reports especially during the holiday season when there are maximum chances of identity thefts, errors and frauds.

Taxes and Credit Report

If one notices that a tax lien has been imposed on the credit report generated by the bureaus, then it is imperative that one takes action on the same. This is not a very good sign and it would have a bearing on your credit score. If your credit score is not up to the mark, then it would pose future problems for you with respect to sanction of loan, mortgage etc.

So the 1st thing you need to set right is for any errors or ambiguity in your credit score. You need to get in touch with the credit bureau that has generated your credit report. One needs to begin the process by issuing a dispute letter to the bureau.

Even credit bureaus do commit mistakes with respect to the reports. So you do not have to get worried. Mistakes do happen, but it is your duty to notify the bureau so that the mistakes do not go unseen. Once the bureau is in receipt of your dispute letter, it would look into the matter to confirm if there are any mistakes from their side. The credit bureaus would contact the offices of the Federal Government or State Government to clarify matters relating to your debt. Once they are totally clear about the verification they would intimate you and you would have to shell out some money.

Once could always get in touch with your tax consultant who would help in negotiating the taxes for you. Either you could approach the government directly or through any of these consultants. The choice is yours. A tax negotiator would help in getting you the best possible rates.

The amounts overdue by you are normally collected by the Federal Government or State Government once every 10 years. One needs to ensure that there is no negative report in your credit report, since the account would be in the records of the State for the next 7 years. If your default payments, it would remain in the records, which is obviously not something which anyone would want. Once you have cleared your payment, you need to wait for 3 months, till you hear something from them and remind them again with another dispute letter requesting the bureau for validation. It has been observed that once the government has received your payment, they would not consider the bureaus validation request.

So just to be on the safer side, you need to send reports stating that you have cleared all the amounts pending, so that you are clear from your side.

Post payment: Individuals interested in settling payments partly can opt for an OIC. State Governments normally agree to such OICs. Before agreeing to the OIC, the Government would make its enquiries relating to your asset value, your previous credibility, creditworthiness, whether you would default any further payments. One could always forward a letter of hardship stating that you are going through a financial crisis. This letter might be considered by the Government.

Obviously, you would not want a negative mark on your report. So what are you waiting for? Try and pay all your outstanding and start afresh. A seven year period is too long. Do not wait. Go ahead and try and clear your amounts.

Foreclosure and Your Credit Report

People who have faced foreclosure need to hire a credit advisor who will help them clean up the tarnished report. Besides the payment defaults that appear on the report, there are other issues like” Notice of Trust Sale” and the “Trust Deed Sale” which worsens things. Since there are so many things you need to deal with, hiring a credit advisor would be beneficial and can work with you to suggest ways to improve the credit scores from the current levels.

Though a clean up will not mitigate the negative impact of the foreclosure for close to a year, you can breathe easy for the next 7 – 10 years. Since the report will reflect prominently the last year details, it is in your interest to iron out the gaps to achieve financial bliss.
The bad news is that you will encounter refusal of credit, for a car or for your personal use over the next 3 – 5 years once the foreclosure is mentioned on your credit report.

You will need to get a score of 740 or higher to avail of a 30-year home loan at fixed rate of interest and even then, banks will want a 20% margin payment upfront. Some banks may permit a score of 620 and a 10% margin payment, but the fact is that you need to clear the report of its bad elements at the earliest.

Now the question is, what can be worse – foreclosure or bankruptcy. Opinion is divided on this, though many feel that a foreclosure is viewed more seriously by the creditors, the assumption being that bankruptcy excludes the house. Borrowers need to quickly start making up on the payment of the defaulted ones to retain the house.

You have two options – to restructure the agreement to procure a lower rate of interest or to ask for some time during which the creditor accepts suspension of payments till you can start making them again. As a desperate third option, if you absolutely struggling for finances, you can request the creditor to postpone foreclosure till you can dispose off the asset. You may still not get the amount you seek and have debt to be settled, but at least you can work out a “deed in lieu of foreclosure”, wherein you pledge your house to the bank.

Many people look at bankruptcy as an option but this needs to be used as a last gambit, since it can be very destructive to your credit report. You anyways need to make the monthly payments even when you declare insolvency. The only relief is you have the court on your side till the time you make up for the missed payments.

It is better to work out a restructured plan with the creditor and start making the payments slowly over an agreed tenure. This will not impact your credit score very harshly and you can set it right in the next 12 to 18 months.You can also request for some time from the creditor, to recover from a temporary problem of finances. You however, need to then meet the commitment made without fail.