The credit rating agencies compile data used to calculate credit scores, but this has nothing to do with loan approval nor can credit agencies change the terms of a credit agreement. The only parties authorized to change the terms of a credit agreement are those that sign the promissory note.
Identification
Only creditors, such as banks, auto dealers and private lenders, can decide if you are creditworthy. Lenders pull credit reports from credit agencies to weed out applicants that present a clear risk to the company, such as people with bankruptcies or multiple collections accounts. Credit agencies cannot change the terms of an agreement because they are not the original creditors. The most they can do is verify account data.
Who Can Change the Terms of an Agreement?
Technically, any party to the contract can change the terms of an agreement, but the other party or parties must agree to it. Some contracts allow the lender to change the terms of a contract at his discretion. Adjustable rate mortgages, for example, allow the provider to change the interest as long as the borrower receives advanced notice. Credit cards often change the terms of the agreement but need to give borrowers 45 days advance notice.
Should You Accept Changes?
Accepting changes to a loan agreement requires the borrower to take into account his specific situation. Changes to credit card agreements may require the borrower to accept them or close the account. Closing a credit card account could lower your credit score. In the case of an adjustable rate mortgage, the borrower may have no choice but to accept the new changes.
Tip
You might have to go to a judge -- a credit agency can do nothing -- if changes to the terms of an agreement become predatory. Signs of a predatory agreement include payments that exceed the agreed-upon amount when closing a home or when the lender tells you to falsify information on the application.
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