How to Erase Unpaid Accounts From My Credit

A good credit score means getting the best interest rates on home loans and auto loans. Negative collection and charge off accounts that appear in a credit report can damage scores for years. Those with credit scores under 600 end up paying higher interest and being denied low-interest credit cards. However, unpaid accounts may not be yours or could be from an ex-spouse. Knowing exactly what is in your credit report is key to removing inaccurate and old accounts.

Instructions

1

Order your free annual credit report online from all three credit reporting bureaus. You are entitled to a free credit report from all three bureaus each year, so taking advantage of this is the first step in cleaning up your credit report. You will normally have your reports in seven to 14 days.

2

Examine the reports thoroughly when they arrive. You are looking for inaccurate information such as old accounts that are not yours. Additionally, find all old accounts that are most likely at collection agencies. Collection accounts drag your credit score down, so these will need to be addressed (see Reference 2).

3

Collect all the accounts that are not yours, and dispute this with the credit bureaus directly---all three have online options for disputes. When you file a dispute, the company who reported you has 30 days to respond, if they do not, they must delete the account from your credit file.

4

Write the validation letters based on the samples provided online to the collection accounts in your credit file that are yours. Collection accounts are normally sold many times. When they become older than five years, many of the collection accounts are unable to validate the debt. They have 30 days to respond to you.

5

Mark the date you sent the validation letter, and if you hear nothing from the collection account in 30 days, send another letter demanding the debt be removed from your credit file completely. Based on the credit laws in place, they must remove the account. If they fail to do so, contact the reporting credit bureaus.

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How to Delete Negatives From My Credit Report

Your credit report contains information about how you have handled your debt payments in the past, such as your credit cards, mortgages, car loans and student loans. Having a good credit report is important because the credit bureaus calculate your credit score using the information in your credit report. Negative information such as late payments or defaults will lower your credit score. If the information in your credit report is correct, you cannot delete negatives from your credit report. However, if the information is errant, you can dispute any errors you find by reporting the misinformation to the credit bureau .

Instructions

1

Request a copy of your credit report. Federal law entitles you to one free report from each of the three major credit bureaus--Experian, Equifax and TransUnion--once per year, which you can request through the Free Annual Credit Report website (see resources).

2

Look up the account information of any errors that you find so that you can make sure that you dispute the exact information that is incorrect.

3

Decide whether to appeal online or through the mail. If the error is on the Experian credit report, your only option is to appeal online. Equifax and TransUnion accept appeals through the mail. Usually, you should appeal through the mail because you can submit documents supporting your claim. If you choose to appeal through the mail, skip to Step 5.

4

Appeal the credit errors online by going to the credit bureau website for disputes (see Resources). You will need your personal information, credit report number and the credit report error that you are disputing.

5

Make a copy of evidence to support your dispute, such as bank statements or notices from the creditor that payment was received. The Federal Trade Commission warns that you should never send originals.

6

Mail your evidence along with a letter stating your dispute and a copy of your credit report with the error circled or highlighted to the credit bureau that is reporting the errant information. The mailing address for disputes for Equifax is, P.O. Box 740256, Atlanta, GA, 30374-0241 and the mailing address for TransUnion is 2 Baldwin Place, P.O. Box 2000, Chester, PA 19022. The Federal Trade Commission recommends sending the letter via certified mail so that you can document that it was received by the credit bureau.

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How Much Will a Credit Score Increase With Paid Collections?

Paying collections is one of the toughest choices to make for a person's credit history, because it may not improve a credit score but likely improves the creditworthiness of the borrower. More important than the impact on a credit score is how future lenders look at paid collections. Also, avoid settling, because this just puts a further drain on a credit history.

Identification

A fully paid collections account has a minimal impact on a credit score, because the important thing is that the borrower broke the terms of the agreement in the first place, according to Experian. Paying a collections only helps in the outstanding debt category of the FICO score formula. Collection accounts are the second closest thing to a bankruptcy, so eliminating some debt from a credit profile is not effective in raising a score much, because the FICO formulas responds more to negative items.

Warning

When a borrower agrees to anything with a collection agency, he should always get the terms in writing. Even if the borrower pays in full, he should get a statement that the agency will report the item as "paid as agreed." Settling for less than the balance damages a credit score, because it shows up as a debt settlement, which can cause up to 125 points in damage, according to Bankrate.com. Sometimes, if the borrower agrees to pay in full, he can negotiate for a deletion of the account.

Considerations

Future lenders will probably give extra consideration to an applicant with a low score if he pays off a collection account, because it shows integrity and desire to pay off debt. This is especially true for lenders that look at credit reports as part of the underwriting process, such as mortgage providers, and lenders the borrower deals with face-to-face. Some borrowers may feel more confident about their finances by paying an old debt.

Tip

The Fair Isaac Corp. released a reworked versions of its widely used FICO scoring system in 2008. FICO 8 ignores collection accounts with an original balance under $100, according to Ellen Cannon of Bankrate.com. In this case, paying a collection under $100 only helps loan approval chances if the lender requires it or wants to see even the smallest debt repaid.

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After Seven Years of Filing Chapter 13, How Much Will My Credit Score Go Up?

After seven years of painful waiting, a Chapter 13 bankruptcy finally leaves your credit report, but this could actually drop your score. Some people experience this anomaly because of quirks in the FICO scoring system, but fortunately even if this does happen to you, your score eventually bounces back. Most people see a boost from a Chapter 13 leaving their credit profile.

Potential Drop

The FICO scoring algorithm is really several formulas that rate the likelihood of a certain demographic defaulting on a loan, such as new borrowers. You might have a good score with a bankruptcy on your record because the FICO model compares your borrowing habits to other people with a bankruptcy. Once this item falls off your report, the FICO model puts you in a category of people without bankruptcies, so your payment habits may not appear as strong.

Considerations

Eventually, your score goes up when a bankruptcy is off your report and you manage credit responsibly. At the height of its impact, a bankruptcy might bring down your score by 240 points, according to CNN. If you have no other reportable negative items, like missed payments, you score could go up even more than this.

Timing

The clock starts ticking as soon as you file a bankruptcy motion with the court, not when you finish the Chapter 13 payment plan. Also, some of the accounts included in the bankruptcy may have already left your report, because the credit bureaus use the date of the original delinquency and including an account in a Chapter 13 case does not extend the period the agencies can report it.

Tip

Review your credit report after the bankruptcy leaves your report. All accounts included in the Chapter 13 filing must carry the notation "Included in Chapter 13 Wage Earner Plan" and the creditor cannot continue reporting the account as delinquent once you satisfy the Chapter 13 repayment plan.

You should build credit while the bankruptcy remains on your report -- you can probably enter the 700s again by building good history on new accounts. Try a secured card, which usually has a credit limit equal to your deposit and financing from auto lenders, because they often lower credit standard to meet sales requirements, suggests Aleksandra Todorova of SmartMoney.

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Can I Get an IRS Debt off of My Credit Report if It Is Older Than Ten Years?

Like all debt, IRS bills eventually become noncollectable, but not paying your tax debt could haunt you for the rest of your life and cost much more than what you owe the federal government. Most bad items eventually leave your credit report, but you can probably never wait out federal tax debt.

Identification

The Internal Revenue Service does not report delinquent tax debts to the credit bureaus, because it is an unnecessary step. It has a more powerful weapon: tax liens and levies. When you do not pay taxes, the IRS puts a public claim on any of your property and the credit bureaus find out about it. The credit bureaus can report the lien indefinitely and TransUnion and Equifax do, but Experian only reports tax liens for 15 years. Some states further restrict reporting tax liens, such as California, which limits the time to 10 years. Unless you live California, you cannot remove an IRS tax lien after 10 years.

Considerations

Once you pay your tax debt, the IRS issues a Release of the Notice of Federal Tax Lien and the bureaus report the lien for seven years. If 10 years pass, you should dispute the lien with the credit agencies---ideally sooner because of the seven-year rule. The bureaus could remove an unpaid tax lien after 10 years if the IRS does not respond to a dispute. This might happen should the IRS deem the account noncollectable and not waste taxpayer resources responding to a credit agency.

Exception

A removal of a federal tax lien does not totally put you in the clear. The credit bureaus can ignore time limits on reporting IRS tax liens when you apply for more than $150,000 in credit or life insurance and a job paying more than $75,000 per year, according to the Federal Trade Commission.

Tip

Future lenders will probably pull your report from all three agencies, so creditors usually find out about an unpaid tax lien. Tax liens put a huge drag on scores. Thus, you should pay them off immediately and wait the seven years. The tax lien should have a minimal effect sooner than seven years, because negative items become less important over time. You can try to bargain with the IRS for a settled bill, called an Offer in Compromise. These, however, rarely work, because IRS debts are secured by the lien and thus usually not included in a bankruptcy discharge.

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How to Document an Identity Theft Crime Scene

You tried to protect yourself, but the worst has happened: Someone has stolen your identity, using your Social Security number or credit-card information to make fraudulent charges and stick you with the bill and an injured credit report. It's important to get your facts straight from the start, so try to keep a level head. Jumbled, conflicting information could lead your creditors to doubt your innocence. You need to know how to properly document an identity theft crime scene, which will ensure that you have done everything in your power to correctly report fraudulent charges and accounts.

Instructions

1

If someone has been using your Social Security number, report it by calling the Social Security Administration inspector general's fraud hotline at (800) 269-0271. Also mail a formal written complaint to: Social Security Administration, P.O. Box 17768, Baltimore, MD 21235. Find more information at www.socialsecurity.gov/oig.

2

If someone has been opening new credit card accounts in your name or using your existing accounts fraudulently, notify the three major credit-reporting agencies, TransUnion, Equifax and Experian. Request a copy of your credit report from each agency. Because you suspect fraud, it should be free.

TransUnion: P.O. Box 1000, Chester, PA 19022
(800) 888-4213; www.transunion.com

Equifax: P.O. Box 740241, Atlanta, GA 30374-0241
(800) 685-1111; www.equifax.com

Experian: P.O. Box 2002, Allen, TX 75013
(888) 397-3742; www.experian.com

3

Once you have received your credit reports, find the accounts that are being used fraudulently, close the accounts immediately, and dispute the charges with the creditors.

4

If a new account was opened in your name, fill out a federal ID Theft Affidavit (available at www.consumer.gov/idtheft/pdf/affidvit.pdf). Send copies by certified mail to the companies involved. If an existing account has fraudulent charges on it, send the affidavit and documents to support it -- such as your police report or any collection agency notifications -- to the companies involved by certified mail.

5

Send a letter by certified mail disputing the fraudulent charges or accounts to the credit agency that is reporting them. (For example, if Experian is reporting a fraudulent MasterCard account, send a letter by certified mail to Experian disputing the account.) Request an initial fraud alert that will last for 90 days; after the 90 days, you may file for an extension, which will stay on record for seven years.

6

File a Miscellaneous Incidents Report with your local police. Keep a copy of the police report for your records.

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How to Protect Credit Rating From a Separated Husband in Pennsylvania

When you've separated from your husband, one of the last things you may be thinking of is your credit rating or score. Yet, it's important that you take steps to secure your property and credit so that if you end up getting a divorce, you don't emerge from it in a rough financial spot. You should come to an agreement with your spouse before the separation in order to make sure your credit is protected and that he will not be able to run up credit card debt in your name.

Instructions

1

Hire a lawyer and a mediator to help you draft a separation agreement and determine how property will be split. In Pennsylvania, there is no "legal separation," but you should still come up with an agreement as to how you will divide any debts, property or custody, especially if you intend for the separation to end in divorce.

2

Sign up for your own credit card and bank account.

3

Split any credit card debt you and your husband share in a manner that is fair to both parties. Transfer your portion of the debt to your new credit card and have your husband transfer his to his own card. Close any joint credit card accounts and let your creditors know you are separated.

4

Remove your husband as a card holder from any credit card accounts you may have in your own name. Ask him to return the credit card to you and cut it up. If you keep him as a card holder, you will be held solely responsible for any debt he incurs.

5

Make sure all your bills get paid each month, especially ones in your name. Not paying utility or telephone bills can ding your credit score. Assume responsibility for all the bills in your name and close any accounts you do not personally need.

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FICO Scores & What They Mean

Many consumers do not have a clear idea of what FICO scores are, what they mean and how they can affect real-life circumstances. The FICO score is determined by a mathematical formula, and there is a direct correlation between your score and your ability to secure preferred loans or home mortgages. You should understand what FICO scores mean to identify ways to start making your score work to your financial advantage.

Background

FICO stands for the Fair Isaac Corporation credit scoring model, a software program that compiles your financial information and credit background to calculate a three-digit number that is considered your credit score. Consumers' credit scores are issued from three credit reporting agencies: Experian, TransUnion and Equifax. These numbers may differ depending on the information used by each agency to formulate the credit score.

Composition

FICO scores are based on several factors, with each given a certain amount of weight: Thirty-five percent of your credit score reflects payment history, including missed payments, late payments and number of accounts paid as agreed, according to MyFICO.com. The amount owed makes up 30 percent of your credit score, and 15 percent of your score relates to the length of your credit history (generally, the longer the better). FICO scores take new credit into account, affecting 10 percent of the score. Types of credit used account for another 10 percent, and, in general, long-term accounts, including student loans and home mortgages, have a more favorable impact on your credit score than revolving accounts, such as credit cards.

Uses

In 2011, most lenders use FICO scores instead of other credit scoring models when assessing the riskiness of making a loan to a consumer. Car companies may view credit scores to determine interest rates for auto loans, and banks may view credit scores to determine interest rates for home loans. Landlords use credit scores to determine the likelihood that a potential tenant will pay rent on time. In some cases, employers use credit scores to evaluate a potential employee's ability to manage money and finances.

Score Range

FICO scores over 700 are considered to be excellent, possibly qualifying consumers for preferred interest rates on loans, according to Bad Credit Advisor. Scores ranging from 600 to 699 are still considered good, and FICO scores ranging from 600 to 679 are considered acceptable. Low FICO scores range from 580 to 619, resulting in higher interest rates and lower credit card limits in some instances. Poor FICO scores range from 500 to 580, and it may be more difficult for these consumers to secure credit. Scores below 500 act as a red-flag to lenders that consumers may struggle to manage credit. A credit score is not the only criterion lenders consider when determining whether to issue a loan, so a low or high FICO score does not guarantee anything. However, it often is a major factor.

Improving Your FICO Score

Consumers wanting to improve FICO scores can take a number of actions. Making on-time payments each month and paying over the minimum required payment when possible will help. You should avoid opening new credit accounts unless necessary, and you should keep billing addresses current to avoid missing bills or account statements.

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How to Remove Bad Credit Fast

By taking specific steps you can fix a bad credit score fast and be on the road toward a good rating. Higher credit ratings are advantageous for several reasons. For starters, applicants with a good credit score often receive the best rates on car loans and mortgages. What's more, insurance companies and employers in the finance industry often review a candidate's credit score before issuing a policy or offering a position. Thus it's wise for responsible adults to maintain a good credit rating.

Instructions

1

Work to keep late payments and past due notices off your credit report. Write down due dates and pay bills on time each month to keep a good payment history with your creditors and raise a bad credit score. Payment history makes up 35 percent of your credit score.

2

Bring down your credit card balances. A significant gap between your credit limit and actual balance on credit cards helps your score. The more you owe, the lower your credit rating. Reduce balances and keep them well below your credit limit. Charge no more than 30 percent of your credit limit.

3

Discuss collection accounts and charge-offs with your creditors. Negative remarks can stay on your report for seven years and potentially reduce your rating during this period. Speak with your creditors to see if they'll accept a settlement or perhaps negotiate a monthly payment arrange. Ask creditors to remove the remark and report the account "as paid" upon receipt of the last payment.

4

Get your credit report. Stay alert to changes reflected on your credit report and challenge any errors or mistakes made by creditors. Order your report online once a year from Annual Credit Report. Take advantage of credit report monitoring services to catch signs of identity theft early.

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Can You Get a Free FICO Score?

Fair, Isaac and Co. is the creator of the FICO score, a widely used credit scoring model that determines a person's creditworthiness or debt risk. There are three FICO scores, one for each of the Big Three credit reporting agencies: TransUnion, Equifax and Experian. These scores are calculated, on average, from a minimum of one account that has been open or updated for at least six months.

How to Get a Copy of your Credit Report (Free)

One of the more popular places to go online and get a copy of your credit report with your FICO score is annualcreditreport.com. You can get a free copy of your credit report once a year, or if you have recently been turned down for credit. Though you may request a free annual credit report separately from each of the Big Three, it is advisable to get a combination report. It may be lengthy (or not), but that way you can have all three FICO scores in hand. Average them by adding the three scores together, then divide the sum by three. You will then know your overall FICO score and see it the way lenders and mortgage companies do.

About FICO Scoring

The FICO score itself means nothing without the rest of the credit report. However, the two work hand-in-hand. The FICO score is a numeric picture of how all of your credit---assets, debts and liabilities look like when rolled into one. The number is then compared with the numbers of everyone else appearing on the credit reporting system and rated accordingly by a ratio called debt-to-income. A debt-to-income ratio is the percentage of a consumer's monthly gross income that goes toward paying debts.

Credit Report Essentials

A credit report is divided into four basic sections: identifying information, credit history, public records and inquiries. Other types of information may include your current and prior addresses, date of birth, telephone numbers, your driver's license number, the name of your current employer, and your spouse's name. The account information will include the name of the creditor and the account number of the trade line. It may also include when the account was opened and any other name or names on the account, as well as the the limits and balances due.

Determining the FICO Score

Your overall score is a matter of having a zero (never having had credit or not enough to report), or having a point 1, meaning that you paid the credit account(s) as agreed. Point 2 means the account was up to 59 days past due when last paid; Point 3 means it was more than 60 but less than 90 days past due; and a Point 5 means the account is more than 120 days past due. Another FICO factor is what is called a "date indicator" that tells the scoring system whether or not the account was paid out in full, closed, declined or charged off. Creditors do not typically subscribe to all three services, so each report will have different information.

How Does FICO Scoring Work?

A bill paid off on time or when due every month adds up to what is called your "credit experience." Likewise if it is paid late, slow, or changed off. According to Fair, Isaac and Co., the FICO score breakdown is as follows: 35 percent is equal to the payment history, 30 percent is the outstanding amount of any reported credit that is owed, 15 percent is credit history length, 10 percent is any new credit obtained and 10 percent is the types of credit used.

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What Is a Credit Score Range?

A credit score represents the information in a credit report as a numeric value. This number is often used to determine not only whether or not a person qualifies for a particular loan, but also the interest rate for that loan. The higher the number, the better the chance of qualifying and getting a better rate. Lower numbers, of course, mean the opposite.

Size

A credit score can range from a low of 300 to a high of 850. Much like other number ranges, however, the minimum and maximum numbers are rare. Most credit scores will be in between the two numbers.

Significance

A credit score is often used to determine whether or not a lender will extend credit to an applicant, and if so, under what terms. Thus, a higher score can mean the difference between getting a loan or not. It can also mean the difference between getting a good or "preferred" interest rate, and a higher interest rate.

Function

A credit score is used by lenders to quickly make a judgment regarding a person's credit worthiness without the need to fully review a person's credit report. This also allows people who have less training to act as loan officers or other people arranging credit since the need to make judgments based on information in a credit report is eliminated. The number a credit score provides can be used to enable computers to make approvals which allows for "instant" approval.

Misconceptions

Many people believe credit scores are permanent or unchanging. This is not true. While the formula used to calculate credit scores is not designed to change by large amounts over short periods of time, credit scores change all the time. Bad credit scores can be raised by eliminating the "bad" behavior and adding "good" behavior.

Warning

There are numerous companies offering to raise your credit score. There is no secret method to raise your credit score. A few years ago, it was possible to raise your score by co-signing certain loans with someone that had a higher score, but Fair Issac has eliminated that loophole. Most for-profit companies offering credit score fixes are fraudulent according to the Federal Trade Commission.

Potential

Improving a credit score can be accomplished by making on-time payments to all accounts over time. Even a short period of such on time payments will improve a credit score. Thus, a high credit score is just a matter of time assuming all payments are made on time, and not too much credit has been applied for.

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How Long Do Trade Lines Stay on My Credit?

Trade lines are the most common item on a credit report and the most important, because they can stay forever. A few mishaps, such as a late payment or two, will disappear from your record even when the trade line remains on your report. Since a negative trade line can stay for years, it is better to prevent defaults that dealing with the damage.

Identification

A trade line, often spelled "tradeline" in the credit industry, is any creditable account, such as a credit card or auto loan. Trade lines stay on your credit report for as long as the account is active. Although the credit bureaus can report closed, positive accounts for as long as they wish, the bureaus choose to omit close positive accounts 10 years after the last payment.

Negative Trade Lines

Accounts become negative when the consumer misses a payment or settles on the bill and the lender reports it to the credit bureaus. All negative trade lines appear on a credit report for seven years. If the account is closed, the trade line is a potentially negative account for seven years.

Misconception

Some trade lines are always negative and result from refusing to pay a bill, such as a collection account or charge-off account -- where the collector declares the debt noncollectable. The same seven-year reporting rule applies to these accounts. The clock can never "restart" on any account, even if you reaffirm it, such as making a payment on the debt or admitting you still owe the debt after the federal reporting period ends, according to John Ulzheimer of Smart Credit.

Tip

You need as many positive trade lines on your credit report as possible. Creditors want to see that you can handle several accounts at once, preferably a mix of installment loans like a mortgage and multiple credit cards. Adding new trade lines can help mitigate the effect of a negative trade line. Some of the easiest trade lines to add to your report are secured accounts -- credit cards backed by collateral -- and retail or department store credit cards.

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Inaccurate Credit Ratings

Consumers can feel cheated after spending hard-earned money on credit scores only to find out that their lender has a completely different score for them, but this is normal. The United States has one dominant credit scoring system (the Fair Isaac or FICO model). Some firms, such as the national credit bureaus, sell scores that look like a FICO score.

Causes

Credit ratings are not "inaccurate," because they only calculate risk based on data in a consumer's credit profile. Missing or false data can cause a higher or lower than normal credit score and is the root cause of consumers seeing several different scores. A falsely reported public judgment, for example, can drop a score several dozen points on a report. Different credit scoring models also can cause variance among scores. Most lenders choose the FICO system for credit scoring, but the major credit reporting bureaus sell scores that are based on the FICO system.

Disputing Credit Ratings

Federal law does not allow a consumer to dispute his credit rating if he thinks it is too low. Instead, he can dispute information in his credit report that causes an inaccurate credit score. The preferred method of a credit report dispute is for the consumer to send a certified letter detailing which information he questions, proof of his claim and proper identification. The bureaus also offer online disputes and creditors can resolve a dispute by sending a correction to the bureaus.

Legal Considerations

Section 609(f) of the Fair Credit Reporting Act -- the main piece of legislation that regulations the consumer credit industry -- gives lenders the right to use a credit score different from that sold by the credit bureaus. However, when a consumer purchases a credit score from a credit bureau, the bureau must inform a consumer that the credit score the company sells can be different from that used by a lender.

Tip

Most credit scoring systems use the same factors when calculating risk but weigh them differently. Thus consumers should put their efforts toward checking their credit reports for errors and practicing good borrowing habits. The Annual Credit Report website is the only site that offers free reports and is the federally mandated site set up by the major bureaus for consumer credit reporting. Always paying at least the minimum on all accounts every month, keeping debt to a minimum and applyimg for new accounts no more than one or twice per year should give customers a high score in any system.

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How Points Affect a Credit Score for Collections

Unpaid library fines and parking tickets might not seem like a major financial issue, but they can have lasting negative impact on your credit score. When creditors don't receive payments owed, they can turn accounts over to collection agencies. These agencies purchase your debt, sometimes at a discount, assuming responsibility for the recovery of the debt. Collection agency letters and phone calls can be intrusive and stressful; they can also affect your credit score in lost points.

Negative Impact

Having an account turned over to collections isn't going to help your credit score. In fact, your score can take a 100-point tumble after a collection agency reports that your account has been turned over to a third party. Negative items on your credit report remain for years, making it harder to land an apartment, get a loan, apply for credit cards or impress a potential employer. Bankruptcies remain on your credit report for up to 10 years; collections accounts and other negative information remains for up to 7.5 years.

Debt Length

Some consumers shy away from repaying accounts that have been turned over to collections because in the past, this well-intended action sometimes resulted in a lower score. That's no longer the case, so repaying an account that has been turned over to collections will eventually raise your score. Paying accounts reduces your overall debt-to-income ratio, boosting your credit score. Once your collection agency notation drops from your credit history, the score will continue to increase. Note that credit scores place heavier weight to new accounts compared with old accounts. Paying off an old account won't have the same positive impact; having an account recently turned over to a collection agency is bad news.

Posting

If you're paying off an account that's been turned over to collections, the payment may not post to your credit history for two months. During that time, your credit score won't be affected by the payment. Paying off a collections account doesn't eliminate the negative mark on your credit history, although the account will be marked "paid." You can try calling the collection agency after paying off the account to ask for the negative report to be removed. There's no guarantee that they'll agree, but it's worth a try.

Good Will

Your credit score may not show dramatic, positive results after paying down a collections account. Yet many lenders look at your overall credit history, not just the credit score. Sometimes making a payment to collection agencies demonstrates good will; lenders like to see that you're making an effort to address past mistakes. This can help counterbalance the negative marks remaining on your credit report.

Contest

Sometimes people don't make payments on past-due bills because they intend to contest the amount owed. Delaying payment can result in the account being turned over to a collection agency, drastically affecting your credit score. Depending on the amount owed, you might be better off paying the balance and then contesting the charge in hopes of a refund.

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How to Add a Primary Account to Your Credit Report

The Fair Credit Reporting Act (FCRA) governed by the Federal Trade Commission (FTC) does not require lenders to report to the credit bureaus. This means that there is no legal method to force a lender that you have a primary account with to add it to your credit report. In some cases, a primary account may appear on some of the credit bureaus' reports but not all of them. Check your credit report with each of the three major reporting agencies (Equifax, Experian, TransUnion ) to detect whether the account shows up on one or more of them.

Instructions

1

Contact the credit bureau from which report the account in question is missing from. Ask why an account you hold isn't appearing on the report. Include copies of documentation supporting that you hold that account, such as recent bill statements, in your error report.

2

Wait for a response from the credit bureau. In some cases, the bureau itself may have made a mistake. For example,it may have reported that account as belonging to another person. In other cases, the report may not be showing up on a particular report because that company doesn't subscribe to that particular credit bureau. The creditor also has the option of not reporting the account at all.

3

Contact the customer service department of the creditor with which you hold the account not showing up on your credit report. Ask why it's not showing up on the report and request that it send the account information to a credit bureau. If you are in good standing with that creditor, its absence from your report can weaken your credit profile. The company may have made an error by not reporting your account.

4

Wait for a response from the account holder. Request any agreement that you make with them to report your account to the credit bureaus be in writing. Some smaller businesses may not wish to report accounts to the credit bureaus due to the expense and their relatively low volume of business.

5

Consider transferring the balance of your account to another company that reports to the bureaus regularly. Inform the company how you are contemplating this move to strengthen your negotiating position.

6

Submit a complaint to the FTC regarding the company's behavior if you would still like to try to persuade them to report the account to the credit bureaus. There is no law requiring that they report to the bureaus, but if you think that the creditor has treated you unfairly, the caseworkers at the FTC may be able to assist you.

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Repo Effect on Credit Score

A repossession occurs when you default on an auto loan and the bank takes possession of the car. According to Financial Web, it's one of the most devastating things that can happen to your credit score.

Effects

According to FICO, 35 percent of your FICO score reflects how well you pay your bills. A repossession indicates that you defaulted on an auto loan and as such, it will lower your score. How much it lowers your score depends upon the other data contained on your credit report.

Significance

A repossession is a negative item and will remain on your credit report for seven years. This may prevent you from obtaining another auto loan from a traditional lender. Subprime lenders that specialize in bad credit may approve you, but it will be at a higher interest rate.

Warning

The repossession of the car does not end your legal obligation to repay the debt. The bank will sell the car at auction and then require you to pay the difference between what they got for the car and the outstanding amount of your loan. This is called a deficiency. The lender can then sue you for this deficiency and obtain a judgment against you.

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Nebraska Security Credit Freeze Rights

A security freeze blocks access by new creditors to your credit report. You have the right to institute a security freeze on your credit report for any reason if you are a Nebraska resident, as established under state law. You must follow the procedures laid out by the major credit bureaus to place a freeze on your report.

Filing

Complete a security freeze form for each of the three major credit bureaus in the U.S., Transunion, Equifax and Experian. Send supporting documentation, including a copy of your state identification and proof of your current address---such as a bank statement---by certified mail to each credit bureau. The forms and exact process varies for each agency, but the form typically requests your personal information, such as your name, address and Social Security number, and must be signed and dated. A unique pin number is sent by mail to your home once the freeze has been processed; the pin is needed to lift or end the freeze. You can dictate how specific you want the freeze to be in Nebraska, blocking all new creditors from your report indefinitely or for a specific time range.

Rights

All consumers can place a security freeze on a credit report in Nebraska, including a minor under the age of 19. However, the parent or guardian assisting with or completing the freeze form must submit proof of legal relationship, such as a birth certificate for the minor or a court order. A person who wants to only lift the freeze for a specific creditor instead of defined a period of time has the right to do so, and he can end the freeze at any time by following the directions of the credit bureau.

The credit bureau can take one to two days to process a temporary or permanent freeze lift, so the consumer can encounter difficulty if attempting to get new credit without removing the freeze beforehand.

Benefits

A security freeze protects your credit. New creditors cannot see your report for the purpose of opening a new account in your name without having your PIN. A victim of identity theft can prevent criminals from opening new accounts and creating debt in her name. You can still see which creditors attempted to access your report while under a security freeze, a helpful option if you are trying to track down an identity thief in Nebraska or outside of the state.

Considerations

You must lift your security freeze by contacting the credit bureaus and supplying your PIN if you want to allow a creditor to view your report. Credit card companies and other creditors with which you have an existing relationship, can access your report in Nebraska, but only for pre-screened offers or existing account purposes. A creditor you already have an account with cannot open a new account in your name without the freeze being lifted.

Fees

Each bureau charges $3 for placing or lifting a security freeze for Nebraska residents as of 2011. Victims of identify theft do not have to pay a fee for a security freeze, but you must provide documentation of the crime, such as a police report.

The credit bureau can take one to two days to process a temporary or permanent freeze lift, so the consumer can encounter difficulty if attempting to get new credit without removing the freeze beforehand.

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How to Clean Up Credit History Legally

Landlords, employers and insurance companies are all checking your credit history. Consumers with less than perfect credit may be feeling the effects. Cleaning up credit imperfections won't happen overnight. However, reviewing your credit report, identifying the areas that need improvement and focusing on behavior changes will clean up credit over time. It's also important to review your credit file to safeguard against fraudulent activity.

Instructions

1

Order a copy of your credit report. The first step in cleaning up credit is determining what's dragging down your score. A free credit report can be obtained from Annual Credit Report (see Resource section). Review the report for inaccurate information, such as late payments, accounts you don't own, and other discrepancies.

2

Report inaccuracies to the credit bureaus. A dispute form is available at each credit bureau's website (Experian, Equifax and TransUnion). After you submit the form, each bureau will take up to 45 days to process your request.

3

Review areas that need improvement. For example, consumers who have a history of late payments need to focus on making timely payments. This factor makes up 35 percent of your total credit rating.

4

Settle collection and default issues. Accounts listed in collections or default are seriously hurting your credit. Contact the lender (or collections agency) and request a payment plan.

5

Pay down debt. The amount of debt you have accounts for 30 percent of your credit score. Keep credit card balances to 30 percent or less of the total available balance. Paying off debt obligations will help you boost your credit score.

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The Best Ways to Monitor My Credit Score

A credit score is what lenders use to gauge how much loan or credit should be given to you. Your credit score is based on your credit report, a factual record of your entire credit payment history created by credit bureaus, updated by additional reports from lenders, and shared with the rest of the industry. It’s best to monitor both your credit scores and credit report, as it also helps you spot any reporting errors or signs of identity theft. For reliable monitoring, get your information directly from the credit bureaus.

Annual Check

The three largest credit bureaus in the U.S. that give credit reports and credit scores are Experian, Equifax and TransUnion. If youd like to know how theyve all assessed you, you can try Experians 3-Bureau Credit Report and Score package once a year and get information from all three bureaus. The package is advertised at $39.95 as of 2010.

Quarterly Monitoring

If you prefer monitoring on a quarterly basis, you can try Equifax, Inc.s 3-in-1 credit monitoring subscription service for registered members. Aside from getting a once-a-year credit report featuring all three credit bureau assessments, you can get Equifax credit scores four times a year. For $14.95 per month as of 2010, the service comes with monitoring and email or wireless alerts for any changes that may occur in your nationwide credit reports.

Monthly Monitoring

TransUnion has a service package called TrueCredit that can provide all three credit bureau credit scores, updated every 30 days. The package also includes identity theft insurance, personalized debt analysis, credit trending, and a first-30-days free trial period. After the 30 days, it will cost you $14.95 per month.

Weekly and Daily

You can go as far as monitor your credit score per week or day. Such services are available for purchase at the Equifax, Experian and the Fair Isaac Corporation (FICO) sites. FICO computes its own credit scores and claims its scores are used by 90% of the largest banks to make credit decisions. If youd like to specifically monitor your FICO scores, you can opt to get their Score Watch package, which includes weekly updates. The package also includes daily monitoring of your Equifax credit report. When purchasing the service, you can opt to pay a monthly fee of $12.95 or a $129.95 fee per year. Equifax offers its own Score Watch package, which gives you continuous score monitoring and notification on your Equifax scores. You are also notified via email or wireless of any key changes to your Equifax credit report. The fee is $12.95 per month. Experian also offers Triple Advantage Credit Monitoring. You can monitor credit reports from all three big bureaus online and get unlimited Experian credit reports and credit score tracking as well. As of 2010, you can first get a seven-day trial period for $1 before deciding to fully sign on. The package costs $14.94 a month thereafter.

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Does Paying for Insurance Build Credit?

Not all of your bills affect your credit score. The only payments that regularly appear on your credit report are those in which you borrow money and are paying it back. Because insurance is a service, not a loan, paying your insurance premiums will generally not build your credit history.

Payments Not Reported

In order for payments to affect your credit score, the company you are making payments to must report these to the credit reporting bureaus. Once the payment history appears on your credit report, the credit score formulas consider this data when providing information to lenders. Insurance companies do not generally report any payments to the credit bureaus, so these payments can't help build your credit.

Negative Credit Effects

Although paying your insurance does not generally help your credit, it can hurt your credit if you fail to make your insurance payments as agreed. If you are severely late, the insurance company might turn the debt over to a collection agency, which will report it to the credit burueau, and the credit bureau adds it to your credit report. This will lower your credit score, even if you pay it off later.

Using Credit Card

One way to help build your credit is to put your insurance premiums on your credit card and pay the card off. Your credit card company will report payments to the credit bureaus. Light credit card use and timely payments demonstrate you can responsibly borrow and pay back money. However, you should try to keep your credit card balance low relative to your credit limit. This percentage is called credit utilization and plays a significant role in the credit score formula. MSN Money columnist Liz Weston recommends keeping your credit card balance below 30 percent of your credit limit to maintain a high credit score, although she notes that credit utilization of 10 percent is even better.

Credit Affects Insurance

Even though making insurance payments does not build your credit score, having good credit does help you when it comes to car insurance. Many insurance companies check your credit to help determine the premiums to charge you, because they have found that people with bad credit make more car insurance claims than people with good credit. If a car insurance company charges you extra or denies coverage because you have bad credit, it must notify you in writing and provide instructions on how to view your credit report.

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The Most Reliable Credit Reporting Agencies

Credit reports are used for a number of instances throughout a consumer's lifetime. In addition to checking a report in order to grant new credit accounts, potential employers, utility companies and insurance companies can also access a consumer's credit file before granting service or extending an offer of employment. As of 2010, three major credit bureaus are responsible for reporting the payment history and account information of consumers.

Equifax

Equifax has more than 100 years of experience providing both business and consumers with access to credit reports and scores. The company is headquartered in Atlanta and has employees throughout North America, Latin America and Europe. In addition to providing a full credit report and score to consumers and businesses, Equifax also provides credit monitoring and protection services to individuals. Consumers may choose to receive monitoring from all three credit bureaus, with notifications sent if there is a change in the information contained in the report. The company also offers the opportunity to track the consumer's Equifax credit score and suggested plans that are designed to help consumers pay down debt faster while raising their credit scores. As of 2010, Equifax products range from $12.95 to $16.95 per month.

Experian

Experian was founded in 1980 and has grown to provide credit information services to consumers and businesses in more than 65 countries worldwide. The company has corporate offices in California and Illinois with regional offices throughout the world. New customers to Experian can check their credit reports through a seven-day trial that includes their Experian credit score and a trial of Triple Advantage Credit Monitoring Services. The company also offers consumers access to all three credit reports and scores, as well as daily monitoring services for all three bureaus. Identity theft protection and email alerts for key changes to the report are also available. As of 2010, Experian products range from $12.95 to $39.95 per month.

TransUnion

TransUnion was founded in 1968 and maintains credit reports of 500 million consumers worldwide. The company is headquartered in Chicago and provides services to businesses and consumers in 25 countries throughout North America, South America, Africa, Asia and Europe. The company offers new customers a free trial of its services including monitoring of all three credit bureaus and a free TransUnion credit score. TransUnion will also assist consumers who are victims of fraud or identity theft and offers up to $25,000 in identity theft insurance. Consumers also receive personalized credit trending and debt analysis to determine ways to increase their credit scores.

Also offered by TransUnion is zendough services, providing detailed information regarding credit scores, account summaries, credit and ID email alerts and a consumer's credit score and grade. Prices for TransUnion services vary depending on the selected program and are available upon request.

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Does Opening New Accounts Affect Your Credit?

Opening a new account may cause a change in your credit score, depending on the type of account. In most cases, the result of opening a new account will be a lower credit score. By understanding how opening a new account will affect your credit score, you can determine if opening a new account is a good decision.

Bank Accounts

There will only be an impact on your credit score when you open an account that reports to the credit bureaus. For example, opening a savings or checking account will not affect your credit in most cases, as financial institutions generally do not report these accounts to the credit bureaus. If the account includes overdraft protection, the bank or credit union may report account activity to the credit bureaus, and some banks and credit unions will request a copy of your credit report when you open a new account, which will affect your credit score.

Credit Accounts

Opening new credit card accounts or taking out a loan such as a mortgage or car loan will affect your credit, as lenders will report activity on these accounts to the credit bureaus. Not only will opening a new account affect your credit, but simply applying for a new account will also affect your credit. This is due to the lender making a credit inquiry with the credit bureaus. The lender uses your credit report and score to determine whether or not to issue you credit and at what terms.

New Accounts

Credit bureaus use the number of new accounts as one factor in determining your credit score. Information on new credit accounts represents 10 percent of a FICO score. As opening a new account is the only factor making up this 10 percent, the impact of opening a new account is minimal. If you have a high credit score, the reduction from opening one account will be of little significance. If you have some credit problems, the reduction from opening a new account may make it more difficult for you to obtain more credit in the near future. Regardless of the initial impact of opening the account, if you use the new account and your existing accounts wisely by reducing debt and making the payments on time, your credit score will improve over time.

Other Considerations

Though opening a new account may lower your credit score, there are positive effects to consider. A new account will increase your available credit, which will decrease the percentage of available credit that you are using. If your new account is a different type of account than your existing accounts, you may also receive a credit score boost. For example, if all of your open accounts are installment loans, your score may increase from opening a credit card account. While these positive effects will generally not outweigh the negative effect of opening an account, it can help to reduce the impact.

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Where to Get an Absolutely Free Credit Score

Although you are entitled to access a copy of your credit report from each of the three major credit bureaus once annually, you are not entitled to a free credit score. The majority of places on the Internet offering a free credit score require you to provide information and enroll in a free trial of a program that becomes an annual subscription if you do not cancel in a set period of time. However, there are several places on the Internet where it is possible to obtain a completely free copy of your credit score.

Credit Karma

Credit Karma provides customers with a free credit score once each day. The site is supported by advertising, so there is no charge to consumers and consumers do not need to provide credit card information. The only personal data required is the information necessary to retrieve your credit report.

Quizzle

Quizzle provides free access to a credit report and score once every six months. Again, there is no charge for this service and you are not enrolled in a free trial. No credit card is required, and the only personal information necessary is the information required to obtain your credit report.

Free Credit Report

Although your free annual credit report does not provide you with a credit score, it does provide you with useful information about your credit and payment history. By checking your credit report periodically through this free website, you can monitor for changes to your credit report, and identify mistakes that may have an adverse impact on your credit score.

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If You Are Late on Utility Bills, Does It Affect Your Credit Score?

Missing a utility bill payment usually triggers a late fee, but in some cases, it can have an even more significant impact by lowering your credit score. The effect of late utility bill payments on your credit score depends on whether or not the utility company reports it to the credit bureaus.

Credit Report

Your credit score is based on the information that appears on your credit reports. Therefore, information that is not on your credit report cannot affect your credit score. Your payment information appears on your credit report only when lenders send the information to the credit bureaus. Negative information, such as late payments, will hurt your credit score, whereas positive information, such as on-time payments, will help your score.

Slightly Late

In general, utility companies do not report payment history information to the credit bureaus on a regular basis. This is because they are not creditors in a formal sense and because the credit bureaus charge companies a fee to submit information for credit reports. Utility companies generally do not want to go through the hassle and cost of reporting payment history. Therefore, if you are only a month late on your utility bill payment, it should not affect your credit score.

90-Day Delinquency

When a utility bill is left unpaid for 90 days, the company generally considers it to be delinquent and sells the debt to a collection agency. At this point, it will appear on your credit report and affect your credit score. In addition, the collection agency will call you and send letters to try to get you to pay the debt.

Credit Score Effects

When a late utility bill makes it onto your credit score, it will have a negative impact for up to seven years. After this point, the credit bureau is no longer allowed to report the negative information. The number of points your score will drop depends on several factors. Larger amounts due have a greater impact. People with higher credit scores will see a greater drop with a late payment. The impact of a late payment on your credit report will lessen as time passes.

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How to Create a New Credit Report

With a majority of your lager purchase relying on loans (car and home), it is important to stay up to date with your credit score. The higher your credit score, the more likely you are to be approved for a loan and the lower the interest rate is going to be. It is important to create a new credit report once or twice a year to know exactly what is going on with your score and if there are any mistakes present.

Instructions

1

Navigate to a site such as "AnnualCreditReport.com" or "Equifax.com." These are two sites that provide free annual credit reports without asking you to sign up for a service. You may have seen advertisements on television for a free credit check Web site, but these sites require you to sign up for a monthly service before giving you the credit report.

2

Select the state you are in and click "Continue" once you have arrived at the site. A new page is now going to load.

3

Type in the asked information including your name, current address, Social Security number and phone number. Submit the information and in a moment the site brings up your credit score.

4

Look through your credit score. It may be helpful to print off the report. Do this by clicking "File," followed by "Print."

5

Sign off of the site when you have finished with your new credit report and clear out your Internet history. Click "Internet Options" in Internet Explorer, followed by "General" and "Clear History." In Firefox click "Tools," "Clear Private data" and finally "Clear Private Data Now." This removes the history of you visiting the site and the chances of another individual coming across your credit information.

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Consumer Credit Problems

Signs of consumer credit problems include a bad or low FICO (an acronym based on the Fair Isaac Corporation) score, high credit card debts, bankruptcy, foreclosure and the inability to acquire credit. Being an undesirable candidate for a loan can complicate your personal finances, since you're less likely to buy a home or car without credit. Rather than live with consumer credit problems, take steps to fix a bad history.

Causes

There is no one cause of consumer credit problems, and often, problems arise from situations beyond a consumer's control. For example, losing a job or experiencing cash flow problems can hinder a consumer's ability to pay loan payments and credit cards on time, and numerous skipped or late payments can severely damage a credit rating. Then again, some consumers do not know how to budget or live within their means, which can trigger debt and bankruptcy.

Dangers

Credit problems do not only affect the ability to get new lines of credit. Employers in the finance industry and some insurance companies run credit checks on interviewees and applicants to assess how well they manage money and debt. A bad credit score can cause consumers to miss out on job opportunities, and insurance companies may charge higher premiums to those with a low credit rating.

Considerations

Managing monthly payments better is one way to resolve consumer credit problems and demonstrate responsibility. Tossing statements aside when they arrive in the mail and forgetting to send in payments by the due date contributes to late fees, a higher interest rate and a bad credit score. However, consistently delivering payments on time improves credit scores.

Prevention/Solution

Bear in mind the role debts play in consumer credit problems. Uncontrolled spending, maxed-out credit cards and constantly applying for new credit cards can create a lifelong battle with debt, and if you are unable to reign in excess spending, bankruptcy may become the only solution. Bankruptcies remain on credit reports for between 7 and 10 years, and this blemish takes several hundred points off your rating. Learning how to control debt is key to avoiding bankruptcy. Slash credit spending, make larger payments and use cash to help bring down balances.

Expert Insight

Getting help for consumer credit problems can help you avoid bankruptcy and eliminate debt within a few years. Nonprofit credit counselors are available to educate you on proper credit use and debt management, and to help you negotiate better rates and payments with your present lenders and creditors.

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What Organizations Can Report Debts to the Credit Bureau?

Credit scores can be an important part of the lives of United States consumers. The credit score contains information about payment history on accounts, the number of inquires into the report and any public records against the consumer. Lenders use the credit reports of applicants to determine whether they qualify for a financial product. Many employers also check the credit of potential employees to determine whether to hire the person. Knowing what types of accounts can report to a credit bureau can help consumers keep accurate information on their reports.

Financial Companies

One common type of account listed on a consumer's credit report is reported by a financial company. Lenders report information about mortgage, auto, student and personal loans, as well as any information about credit card accounts. The information reported includes payment history, amount of credit on the account and terms of the loan. Financial institutions also may report whether an inquiry was made, such as an application for new credit. If a consumer defaults on a credit product or overdraws a checking account, the company can report negative information to the credit bureaus. Financial companies can include banks, credit card companies and credit unions.

Collection Agencies

If a consumer defaults on credit repayment obligations, a lender may send the account to an outside collection agency to attempt to collect. The collection agency can report information to a credit bureau. The agency reports the amount it attempts to collect and whether the debt has been paid. Collection agencies can report debts that have been purchased by the agency or debts they are collecting on behalf of the original creditor. An agency can report an inquiry if one was made to obtain updated information.

Courts

Consumers who default on debt repayment obligations to the point of having a lawsuit brought against them may have entries on their credit reports from the court system. The courts are responsible for reporting items that are a matter of public record, including lawsuits, judgments against the consumer, tax liens and foreclosures. Bankruptcy filings are considered a type of public record and are entered on a credit report by the court. Public records are considered negative information and typically lower a consumer's credit score.

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What Are the Benefits of Using Credit Repair Companies?

The Federal Trade Commission advises consumers to avoid paying for credit repair, but this does not mean a credit repair company cannot save you time and money. While it is true you can repair your credit on your own, this is not always the best use of your time. If you do go with a credit repair company, watch out for potentially illegal practices.

Identification

Credit repair companies do not have any secret knowledge that lets them erase anything. The only benefit they can offer you is saving time. The typical dispute process, such as reviewing a credit report and mailing in a dispute letter, takes four hours on average, according to Bankrate. Letterhead from a credit repair company can also give your dispute an added aura of professionalism.

Considerations

Some credit repair companies can help you automate payments to creditors and even negotiate on outstanding accounts. This might even include the deletion of a bad account. You can do these services yourself, but a credit repair company may help if you feel timid about dealing with a creditor or not confident in your ability to negotiate.

Illegal Tactics

Take caution when you consider doing business with a company that guarantees the removal of any bad item or a completely new credit identity -- these are both signs of a scam. In the case of a new identity, it is illegal for the company to provide and for you to use one. Companies that offer these services commonly use illegal tactics including stealing Social Security numbers from good borrowers that recently died or providing you a taxpayer identification number in lieu of a Social Security number

Tip

Before giving any money to a credit repair clinic, get it to list what services they offer. Compare this to the $30 you would spend on credit reports from all three major bureaus and the value of your time. Check for any complaints about the company with the Better Business Bureau. Also, do not assume that a nonprofit credit repair company is legit. Some for-profit companies set up as a nonprofit to skirt state laws on credit repair clinics.

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What Inquiries Affect Credit Scores?

Companies use your TransUnion, Equifax and Experian credit reports and your credit score to make decisions about granting credit or letting you buy an insurance policy. You give them permission to check your records and pull your score and this activity is recorded so other firms know who has been looking at your credit bureau files. Your credit score also reflects the inquiry process.

Hard Inquiries

Hard inquiries are credit report views conducted by companies in response to credit or insurance applications, according to the Lendingtree website. These inquiries affect your credit score because they represent a financial activity initiated by you. Your score is based on information compiled by the TransUnion, Equifax and Experian credit bureaus, which includes activity on current accounts and applications for new credit. Inquiries are added to your files regardless of whether your new account or insurance policy is approved or denied, and their credit score effect is the same either way.

Effects

Your credit score dips five points or less for a single hard inquiry, according to the MyFICO scoring website, but multiple credit checks have a cumulative negative effect. The score drops significantly if you have six more inquiries close together because you face an eight-times-greater risk of filing for bankruptcy with that many applications on your records. Hard inquiries lose their effect in about two years, when they get automatically purged from your credit reports. A cluster of inquiries for the same loan type, made within a single month, only affect your score like a single inquiry because scorers take rate shopping into account.

Warning

Occasionally you might not recognize a hard inquiry on your credit reports, which could be a sign of fraud. You may also not remember giving a particular company authorization to review your credit bureau records. Review your reports yearly via AnnualCreditReport.com, which is a free website mandated by the Fair Credit Reporting Act, and write to any firms you do not recognize asking them for proof that you have permission for the inquiry. They must comply with your request or eliminate the credit check from your records, according to the Illinois Attorney General's Office. Contact one of the credit bureaus if you believe the inquiry was made by an identity thief. The selected bureau will put a 90-day fraud alert in your records and notify the other two to do the same, the Privacy Rights Clearinghouse explains.

Considerations

You generate a soft inquiry if you review your own credit reports, according to Lendingtree, and this inquiry type also results from your current creditors checking your records and marketers buying pre-screened information about you. You see these inquiries on your credit reports, but they are invisible to companies evaluating you for credit or insurance policies, and they are disregarded by credit scoring formulas.

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