Credit scores have impact on future
It is important to check your credit rating at least once a year. Our nation’s credit reporting system is far from perfect, and that is why it is up to you to check the accuracy of your credit rating.
More than two million people each year find mistakes in their credit reports. We have to remember, our credit report and credit score is a huge part of your financial identity.
In my experiences, I have seen items reported in error. I have seen peoples’ identity stolen and accounts opened in their name. I have seen paid items not properly reported and reflected as an open credit or collection. All of these errors could have a huge impact on your credit score.
So why is your score so important? Credit scores can have an impact on your mortgage rate, possible employment opportunities and sometimes even your insurance premiums. Existing creditors will pull your credit annually and use this information to adjust your credit limits and adjust your interest rates.
If you have been turned down recently for a personal loan or credit card, you’re no doubt aware of the importance of a good credit rating. The sad truth is that most people don’t know what information is in their credit report.
Credit reports display open credit accounts and closed credit accounts. They show account balances, credit available, payment history, credit inquires, collection items, public action and bankruptcy.
To understand your credit rating, remember that there is no such thing as a “universal credit rating system.” Most lenders obtain information about credit applicants from local consumer credit bureaus that receive credit data from retailers and other lenders.
These bureaus, in turn, are linked to one or more of the three national credit reporting companies: Experian (888/397-3742); Trans Union (800/916-8800) and Equifax (800/685-1111).
In Illinois, consumers can obtain free copies of their credit reports from each of the three national credit reporting agencies by visiting www.annualcreditrepor
You may order your reports from each of the three nationwide credit reporting companies at the same time, or you can order your report from each of the companies one at a time. The law allows you to order one free copy of your report from each of the nationwide credit reporting companies every 12 months.
If you find an error you need to dispute the error. By law, credit bureaus must investigate any information you dispute, usually within 30 days. You can then request them to send corrections to creditors who looked at your file during the previous six-month period.
To keep your credit rating strong, the single most important factor is to make prompt payments of your debts or obligations. The timeliness of your payments goes into your files, along with notices of judgments for unpaid debts, liens against property, or personal bankruptcies. It is also important to close accounts your are no longer using. Be selective when opening new credit accounts and don’t always apply for in store credit cards. Too many open accounts will have a negative impact on your credit score.
Take action now to protect your financial identity.
Ryan Heiser/Senior Vice President, Fisher National Bank
Ryan Heiser is the Senior Vice President of Fisher National Bank of Mahomet. He started with the bank in 2006 and has over 16 years of experience in the banking industry. Ryan is actively involved in the community and serves like organizations like the Mahomet Chamber of Commerce, Sangamon River Music Festival and Mahomet Masonic Lodge 220.