How Debt Collection Impacts Your Credit Report

Debt collection significantly impacts your credit reporting history. In this article we will discuss how exactly debt collection can affect your credit reports, and also what protection you have through the law. Debt buyers and collectors actually do have the right to put a note about a debt on your credit report, which can ultimately make it difficult for you to get a loan. However, consumers also have the right to dispute any debt that shows up on their report that is false or incorrect in any way.

You can send something called a report dispute to the credit bureau agencies (Experian, Equifax, Trans Union, and Innovis) and to the debt collector, then the false account must be deleted. If it continues to be listed, then it must show up as "disputed." If the collector fails to do either, then you are able to sue them under the Fair Debt Collection Practices Act or the Fair Credit Reporting Act.

Collectors don't always do what they're supposed to. Sometimes debt buyers "re-age" your account, which is also illegal. This means that instead of a debt clearing from your account after seven years, the debt buyer changes the date to a more recent one. If you have been contacted by a debt buyer or collector, you need to know you have rights.

You are entitled to one free credit report annually (from Experian, Equifax, Trans Union, or Innovis). Keeping up to date on monitoring your reports will help you with spotting wrongful debts. If you have wrongful debts on your report and have properly disputed them then you could be eligible to file a lawsuit under the FCRA or FDCPA.

Most people, who are not financially savvy, do not pay too much attention to their credit reports. What they do not know is that their credit standing is affected tremendously when they fail to pay certain payments. Only a credit report will help you get an idea as to where you stand.

These reports can show what interest rate you are charged when you take a loan or apply for a mortgage because you do not want to get slapped on with high rates. You can easily ask your bank to provide you with an annual credit report and they will do this. There are a number of advantages of having access to this information. Over and above being aware of your credit rating you can also protect yourself from threats like identity theft and credit card fraud.

However, when you avail of a free annual credit report you may not be able to remember if you made certain spends or not, therefore, not allowing you to take advantage of the report. A number of credit monitoring agencies provide you with services that involve tracking your credit status.

They will check your spends and if there is any unusual activity they will warn you and take appropriate care. Identity theft can also be tracked when your accounts are being tracked on a daily basis by a professional credit monitoring company. These companies, however, will charge you a fee and will not give you an annual report for free. Your bank could also provide you with the service of credit monitoring if you instructed them to do so, at a nominal fee and generate reports for you on a monthly basis.

The most important reason for doing this on a regular basis as opposed to getting an annual credit report is that you will be able to check any lapse on your part. If you have been unable to meet a few financial obligations, your report will warn you by giving access to your credit standing.

You can take appropriate measures and get your credit rating back to a positive standing accordingly. But spending just a few dollars and you can make sure that you do not have to pay high interest rates again because of a few lapses. Take charge of your finance and you will be able to achieve a rating that is worthy of getting the prime rate interests. Based on the stated facts in your annual report, you will be able to get prime interest rate from a bank, without the need to convince them.

Current prime interest rate is the lowest rate that the bank charges its special customer and this customer enjoys certain creditworthiness with the bank. This type of rate makes a loan less expensive. Current prime interest rate is very crucial as it has the apparent ability to impact the liquidity of the financial sector.

Credit reports are detailed accounts of an individual's credit history officially prepared by credit bureaus. Lenders of various sorts, such as banks or landlords, refer to credit reports to determine a person's creditworthiness when applying for a loan, mortgage, new bank account or credit card. The three major credit bureaus are Equifax, Experian and TransUnion. Consumers who have been victims of identity theft can also turn to a credit report site to receive a current credit report and determine whether or not their private information has been compromised. Many credit report sites offer security options and credit monitoring to prevent identity theft.

There are many features of credit monitoring that are great whether you are trying to repair your credit or already have outstanding credit. Each of these features can benefit you in a different way. For those with good credit, a monitoring service will help you avoid Identity Theft and allow you to monitor changes in your credit score. For those struggling to build credit or repair bad credit, you can determine the negative items affecting your credit record and monitor your credit score for changes as you make efforts to repair your credit.

For those of you with bad credit, you most likely will want to monitor your FICO score as you attempt to fix your credit. The FICO score is the score most widely used by lenders when ascertaining whether to approve you for a credit card or loan. This is important to note when shopping for a credit monitoring service as many products will give you their own credit score and not a FICO score.

When creditors report to the credit agencies, they are not obligated to report to all 3 of the national credit reporting agencies. For this reason, it would be a good idea to get a copy of your credit report from each credit reporting agency. This will allow you to get an insight on which of your creditors are reporting to which credit reporting agencies. Also, you may find false information that is adversely affecting your credit, but at only one credit bureau. There are many credit monitoring packages available and most will offer a combined 3 bureau credit report.