Financial: Budgeting & Savings

Your Credit Report: How to keep it squeaky clean

Posted: Saturday, October 07, 2000 at 03:53 PM CT

Unless you've recently been denied credit, you may think your credit report--that tell-all document about your credit history--is accurate and up-to-date. Think again.

Recent studies show roughly 25 percent of all credit reports contain some inaccuracy. Ed Ojdana of ConsumerInfo.Com ( reports, "It may be as small as a transposed letter in your previous address, or it may be serious enough to cause you problems. Occasionally, someone may even be using your name and credit history fraudulently."

Odjana recommends, "The time to know what is on your credit report is before you need it. And not just when you apply for credit... potential employers, landlords, and insurance agencies may also ask to see it."

The three best known credit reporting bureaus are Equifax (, Experian (formerly TRW -, and Trans Union ( Each offers a report containing a host of details about you--where you've lived, worked, marital status, and more. Most important, the report tells how good you've been about borrowing and paying back money.

Most bureaus also provide an index or score of your credit record, but it's the lending institution that decides how "credit worthy" you are. According to John Lowe, Assistant Vice President at First Mortgage Corporation, "The lenders each have their own tolerance levels which depends on the type of loan they're offering. Ironically, if you pay your bills in full and don't use credit cards you may have difficulties getting approved because you haven't established a repayment pattern."

Don't assume only your outstanding balances are used to evaluate your credit worthiness. Lowe warns, "If you apply for several loans or credit cards at once, each institution will post an inquiry to your credit report. Even if you don't follow through and open every account, it can raise a red flag that you may be having cash flow troubles. In the same vein, if you keep accounts open, without balances, you have the potential to go into debt quickly. That can count against you as well."

Many people don't realize that credit reports are the source of much of their junk mail. Currently, if a vendor can show that it wishes to contact you to provide specific business offers, it can have access to some of your credit information. This use allows businesses to target offers to prospective clients who meet the credit profile they want.

You can dam the flow of this type of junk mail. To stop it, contact Experian and ask to "opt out." Call (800) 353-0809 or write to Experian, Consumer Opt Out, 701 Experian Parkway, Allen, TX 75013. They share your request with Equifax and Trans Union, so you don't have to duplicate your efforts.

To learn more about how to order your report or what to do if it is factually incorrect, contact the credit bureau directly. If you have concerns because your credit report accurately reflects that you are not a good credit risk, the Debt Counselors of America ( can help you manage your debt and get back on track. Credit repair can take time and effort, but is well worth the work.

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