There are three major credit reporting companies
- Experian, TransUnion and Equifax. All three have similar
policies and practices and are regulated by the Federal Government.
There are some myths about credit reporting, and about the
agencies that handle the records.
First, not all companies report to or use the services provided
by any of the three companies. That’s especially important
if you’re trying to raise your credit score. Here’s
a common trap some consumers fall into. A person with poor
credit will find a company willing to extend credit and take
the loan or credit account, regardless of the poor terms and
rates. They struggle to make the payments, believing it will
eventually reflect well on their beacon
score. But if that creditor
doesn’t report to the major reporting agencies the on-time
payments won’t impact your score at all.
Another common myth about the credit reporting agencies is
that bad accounts stay on the consumer’s record for
seven years. In fact, the seven years begins all over each
time there’s activity on the account. That means that
if the creditor contacts you, the clock is reset. For that
reason, it’s best to deal with your creditors rather
than ignoring them. Don’t wait for the seven years to
pass hoping that the bad debts will simply disappear.
It’s vital to keep track of activity reported by the
credit reporting companies. It’s possible that incorrect
information could be posted to your account. If you find incorrect
information, contact the company the made the report and the
credit reporting company for a correction.
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