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The concept of credit report is crucial to maintaining healthy credit habits among users. It facilitates the frictionless movement of the credit system. A good medical metaphor for the credit report is the health chart. Broadly speaking it plays the role of a financial check-up on consumers. It serves multifarious purposes ranging from security to reflecting the credit status of the users. It is a crucial document for the consumer considering that it determines the usability of your credit card for a host of activities. But many American consumers have complained about the irregular accessibility of these credit reports.
Considering the vital importance of making credit reports readily available to consumers the federal law concerning credit reporting has been extensively reviewed. The federal Fair Credit Reporting Act underwent a comprehensive overhaul last year and the recent change in the act stipulating the nation’s three largest credit-reporting agencies Experian, TransUnion and Equifax to provide consumers a minimum of one free credit report per year, brings the process to a culmination. President Bush ratified the law last year. Initially intransigent the companies have now come together to devise a national clearinghouse that will smoothen the process of procuring the credit report for the consumer.
Wide ranging as the law has been rendered, even the so called ‘specialty bureaus’ have been specified to follow suit. These credit bureaus play a more microscopic role in credit reporting. These are the agencies that cull particularized information e.g. the number of times your checks have bounced or you have sought insurance claims. Or even the times you went tripping through Europe! Albeit these bureaus are no part of the clearinghouse regulated by the above-mentioned agencies, it is obligatory for even them to offer the consumers the information they have gathered on the consumer’s credit report.
The credit report law makes certain other provisions with regard to business users. Mortgage lenders are obligated to provide free credit scores to people applying for mortgages. It has also been rendered mandatory for merchants to delete the last five digits of the credit card number from the store receipts. To curb deceptive practices federal regulators have been asked to make a compilation of ‘red flag’ indicators common to identity thefts. Mortgage and credit reporting agencies are encouraged to use the red flag indicators to track down the perpetrators of fraud with alacrity and take appropriate punitive action.
As has been said earlier, the credit report is a document of immense value for the consumer. It affects a host of activities the consumer might choose to indulge in. For example, the interest chargeable on mortgages you might have or the amount you will be required to pay for a life insurance and so on and so forth. A load of other things important to you, like consumer loans, apartment rentals and even employment are also dependent on your credit report.
Companies are more alert than ever to your credit health and are closely scrutinizing your credit report. If you unduly delay settling any of your pending bills you are liable to be penalized by hiking of your interest rate. And sometimes delinquency in reimbursing creditors can cause the punitive interest rate to soar as high as 30 %.
The consumer should also check his/her credit report carefully for such errors as false delinquencies and accounts as cause them to be denied credit. Also to be guarded against are identity thefts by impostors
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