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Your credit score is the key to your financial life. If you have good credit from paying your bills on time and limiting debt, it will be easier for you to get a credit card or a loan at a lower interest rate than a person with a low credit score.
Bad credit scores make it difficult for you to get credit cards or loans. Bad credit may also prevent you from getting an apartment or even a job. The more serious your credit problems, the longer it will take to fix them. Records of bad credit can go back seven to ten years.
Your credit score is contained in your credit report, which is a summary of your debts and a history of how promptly you have paid your bills. The information comes from the companies where you have credit accounts and from public court records. It is collected and stored by companies, often called credit bureaus, which make the information available to creditors whenever you apply for a loan or credit card or make a purchase on installment payments. It can even be given to a potential employer or landlard.
The Fair Credit Reporting Act requires each of the nationwide credit bureaus – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months. You can find more information at www.annualcreditreport.com. It’s important to check your reports for accuracy since adverse information hurts your ability to get credit or a loan. You have the right to dispute inaccurate information. Incorrect information could also be a red flag that someone is using your identity to get credit in your name without your knowledge.
If you think there is inaccurate information on your credit report, you should tell the credit bureau in writing. The credit bureau must investigate the items in question within 30 days and provide you with a written report of the results of their investigation, correcting any items that are inaccurate.