It is becoming more difficult than ever to qualify for a mortgage. With lenders disappearing and foreclosures on the rise, your credit score needs to be excellent to get a loan approval.
Still, very few people understand credit basics. Even people who have owned multiple homes do not understand exactly how credit works.
This brings us to the most basic credit question of all. What exactly is a credit bureau?
Basically, a credit bureau is a giant record keeper that stores information on almost every adult in the United States. Information includes addresses, employment and most importantly, payment history.
Many people believe that when they find inaccurate information in their credit files that the credit bureau is to blame. Often, you will hear the statement Trans Union is not reporting my mortgage accurately.
This is not true! Your lender is the one reporting inaccurately.
The credit bureaus collect data, but they do not confirm anything. What they report is simply the data that creditors supply them with. This means that a creditor can report anything to the credit bureau and it will appear on your report, regardless of whether it is accurate.
Millions of Americans find errors in their credit files every year. These inaccuracies can be costly, leading to increased rates, credit denial and sometimes even missed employment opportunities.
Since without your involvement, your credit report is simply a large collection of unverified data, the federal government has numerous consumer protection laws in place.
The most important of these to understand is that the only time the information in your credit bureau is confirmed is if you file a dispute with each of the three credit bureaus.
When a credit dispute is filed, it is up to the lender to prove that the item they are reporting is accurate within 30 days. If they do not do this, the credit bureau is required by law to delete the information from your report.
There are many keys to maintaining a high credit score. One of the most important is consumer knowledge and active involvement in monitoring your score.
Still, very few people understand credit basics. Even people who have owned multiple homes do not understand exactly how credit works.
This brings us to the most basic credit question of all. What exactly is a credit bureau?
Basically, a credit bureau is a giant record keeper that stores information on almost every adult in the United States. Information includes addresses, employment and most importantly, payment history.
Many people believe that when they find inaccurate information in their credit files that the credit bureau is to blame. Often, you will hear the statement Trans Union is not reporting my mortgage accurately.
This is not true! Your lender is the one reporting inaccurately.
The credit bureaus collect data, but they do not confirm anything. What they report is simply the data that creditors supply them with. This means that a creditor can report anything to the credit bureau and it will appear on your report, regardless of whether it is accurate.
Millions of Americans find errors in their credit files every year. These inaccuracies can be costly, leading to increased rates, credit denial and sometimes even missed employment opportunities.
Since without your involvement, your credit report is simply a large collection of unverified data, the federal government has numerous consumer protection laws in place.
The most important of these to understand is that the only time the information in your credit bureau is confirmed is if you file a dispute with each of the three credit bureaus.
When a credit dispute is filed, it is up to the lender to prove that the item they are reporting is accurate within 30 days. If they do not do this, the credit bureau is required by law to delete the information from your report.
There are many keys to maintaining a high credit score. One of the most important is consumer knowledge and active involvement in monitoring your score.
About the Author:
Vincent Polisi is founder of financethedream.com. financethedream.com is the nations premier Rent to Own and Lease Option program, offering homes throughout the United States. financethedream.com prides itself on offering a comprehensive home ownership program its clients, including credit reporting and credit repair.
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