Debt reaches all-time high
By DAVE PAYNE, dpayne@newsandsentinel.comOne can never know to much about his own credit.
More people are realizing that and requesting credit reports than ever, said Pam Dowler, director of Consumer Credit Counseling Services of the Mid-Ohio Valley.
"People really need to watch out for identity theft. People are pulling more and more credit reports all the time because of identity theft issues," she said.
But nobody has to steal your identity for someone else's debt to appear on your credit report, Dowler said.
"Make sure that there is no misleading or incorrect information. A person could punch in a wrong social-security number and someone else's debt could appear on your credit report. You could also have paid off a debt, but the creditor never updated," she said. Credit reports contain consumers' identification and financial information. It includes payment history with various creditors and inquiries made by various financial institutions. They also contain information on public record, such as foreclosures or bankruptcies.
Consumer reporting companies collect and sell this information to lenders and other businesses that have a permissible purpose to obtain it. Until federal law giving consumers the right to obtain an annual report for free took full affect four years ago this month, consumers had to buy their own credit reports.
The free reports were mandated by Congress in The Fair and Accurate Credit Transactions Act of 2003. It requires nationwide credit bureaus to provide consumers with a free copy of their credit report, at their request, once every 12 months.
"It used to be the only way you could get it was to go to the credit bureau we used to have on Sixth Street or write," Dowler said. "The only way you could get it free is if you were denied credit," Dowler said.
Addressing credit issues can not only help people's credit scores, but their mental health as well.
According to a study published by the American Psychological Association, people who underwent financial therapy reported significant decreases in depression, anxiety about money, and unhealthy money attitudes, and significant improvements in financial health.
According to the APA, two-thirds of Americans name money as a significant stressor in their lives. Consumer debt has reached all time highs while savings rates have reached record lows.
Knowing what is in a credit report can help consumers fix problems early.
"If you don't keep up with it and there is a problem, you won't know until it is too late, after you've been denied credit for something," she said.
And many might be surprised at what they find.
"If you let your utilities go a month behind, it shows up as slow pay. A lot of people assume that their medical bills have been paid by insurance and if something is not, that will lay on your credit report.
Credit reports often still show debts long forgotten, even money owed from more than a decade earlier.
"A debt will remain on your credit report for 10 years after the last activity. If you have a medical bill, for instance, that's 9 years old, the company tries to make contact and there's new activity on the account. Now, with high debt collection, we've seen collection agencies let a bill lay for seven or eight years, then they find the people. They can send you a statement, whether you pay it or not. There's no way around that, unless maybe a company went out of business. Basically, if you make a debt, you pay for it," she said.
Incorrect information can be fixed, Dowler said.
"One of the things we do is help people write disputes. If there is an error, it can be corrected if you show proof," she said.
For more information, visit www.annualcreditreport.com or call (877) 322-8228.
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buffster1
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09-22-08 10:07 PM
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Consumer credit reports are a joke. I went to get a vehichle loan a while back and I was denied. They said i didnt have enough credit established. What i said? I have had a car loan in the past and i paid it off on time and didnt miss a single payment date. I was later informed that loans from smaller banks dont allways show up on your credit report, which the loan i had was from a smaller bank. seems funny how every bad thing u do credit wise shows up on a report but not every good thing u do does. Just another example of corporate america screwing the little guy I guess.
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