Given the myriad rules and regulations governing credit reports and scores, many consumers do not fully understand these important sources of financial information. Therefore, in order to facilitate greater financial literacy and promote sound fiscal decision making, we closely examined the relevant laws and compiled this Credit Report & Score Bill of Rights.

This document is a summary of your rights and as a result does not include the full details of the pertinent laws. If you want to see the laws in their entirety, check out the Fair and Accurate Credit Transactions Act of 2003, The Fair Credit Reporting Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Credit Repair Organizations Act.

Yes.  You don’t have to have a credit card to have bad credit. If you have or have had a student loan, auto loan or mortgage that you have been late making payments or defaulted on, then your credit score would have been negatively affected.  Likewise if you have had a credit card in the past that you managed irresponsibly then there could be damage on your credit report for up to seven years from the date that any of your old accounts were opened.  Additionally, if you have any accounts in collections (e.g. medical or utility bills), your credit would have suffered.  Lastly, if you have declared bankruptcy in the last 10 years, then your credit is probably pretty bad.

If none of these things apply for you and your are still unable to get a loan, then you probably have no credit, in which case you may want to apply for a secured credit card.  With a secured credit card, a deposit starting at $200, acts as collateral against your loan, and you can start building/improving your credit history with very little risk to you or your lender.

Your new credit card will show up on your credit report roughly a month after you receive the card in the mail.  This first record of your new account on your credit report will mark the end of your first billing cycle.  Each credit card company reports according to its own schedule, therefore there is no set industry standard date for reporting.  Usually, most credit card companies report to the credit bureaus within a couple days of the close of your billing cycle, which falls roughly on the same date every month.  For example, if your billing cycle ended on the 15th of each month, your credit card issuer might report to the bureaus on the 16th or the 17th of each month.  Given that you haven’t received your first statement, you can call your new credit card issuer to find out when your billing cycle begins and ends.

When you fill out a credit card application the credit card issuer will check all three major credit bureaus – TransUnion, Experian and Equifax.  Your credit report should be very similar or the exactly the same across all three bureaus.  If it is not, you may want to check for inaccuracies.

Before deciding to approve or deny your application any credit card company will look very closely at the timeliness of your payments across all of your revolving accounts, the length of your relationships with your lenders and the percentage of the credit that’s been extended to you that you are using at the time of application.

No.  It won’t ruin your credit, and unless you are 30 days or more late, the late payment will not even show up on your credit report.  That being said, this is a very bad habit to get into, so make sure you don’t do it again.  Even if you are just one day late, your credit card company will assess a late fee on your account.  If you are more than 30 days late, your credit card company will report you to the credit bureaus and this one late payment will stay on your credit report for seven years, even though it will only have a marginal impact on your actual credit score after the first couple of years.  The bottom line is that you should everything you can to pay your credit card bill on time EVERY time.

If you don’t pay your credit card bill for a particular month, you become delinquent on your account, and will be assessed a late fee, even if you are just one day late.  If you miss a second payment (which will put you at 30 days delinquent), you be assessed another late fee.  Additionally, at this point your credit card issuer will report you as being late to the three major credit bureaus, which will begin to negatively impact your credit score and affect your ability to get approved for other credit cards and/or loans.  After your late status is initially reported, your credit card issuer will continue to report your delinquency to the credit bureaus, once a month, until you bring your account back to current.

Potential lenders do not necessarily “track your spending” as they evaluate your credit worthiness.  The three things that are most important to any creditor are the timeliness of your payments, the length of your credit history and the way you use the credit that is available to you.
If you don’t carry a balance on your credit cards for an extended period of time your accounts are still reported to the credit bureaus as being “in good standing” every month.  Plus no balance means no bill, so there is no need to worry about making your payments on time.  Lastly, zero balances on your credit card accounts are a good thing for your debt to credit line ratio, which is the sum of the total amount of debt that you have measured against the sum of your available credit across all of your credit card accounts.  The debt to credit line ratio is one of the factors that potential lenders look at plus one of the factors that determines your credit score.

Secured credit cards work just like regular credit cards, and your issuer will report the activity on your secured credit card account to the three major credit bureaus once a month.  This is one of the main benefits of a secured credit card.  Because they require an initial security deposit, which protects both the consumer and the credit card issuer, these cards present very little risk, and can help you build credit while acting as a personal savings account.

This rule applies to the amount of credit extended to you across all of the revolving accounts on your credit report.  This is called the debt to credit line ratio, and represents the amount of debt you have accumulated against the amount of credit that’s been extended to you.  Only revolving accounts are included to calculate the debt to credit line ratio.  This includes credit cards, store cards and home equity lines of credit.  And no, you don’t need to obsess about keeping this ratio low, just try to make sure it is under 60 percent.

If you have a credit card and you choose not to use it, it will affect your credit score positively.  Even if you don’t use your card, your account will still be reported to the credit bureaus every month as being in good standing.

The 3 major credit reporting agencies in the U.S. are Equifax, Experian, and TransUnion.

On a previous article we mentioned how to get a free credit report from all 3 of these credit reporting agencies (or credit bureaus). If for whatever reason you need to contact one of these credit reporting agencies directly we have also summarized their contact info below:

Anyone with what is considered a permissible purpose can look at your report. These companies, groups, and individuals include:

• Potential lenders
• Landlords
• Insurance companies
• Employers and potential employers (usually only with your written consent)
• Companies you allow to monitor your credit report for signs of identity theft
• Some groups considering your application for a government license or benefit
• A state or local child support enforcement agency
• Any government agency (although they may be allowed to view only certain portions)
• Someone who uses your credit report to provide a product or service you have requested
• Someone that has your written authorization to obtain your credit report

If you would like to block lenders, credit card companies, and insurance companies from getting access to your credit report without your approval, you should opt-out. It takes less than a minute and it’s completely free.

Credit reports are full of mistakes. Mistakes on your credit report cost you money.

To clear up errors, you will need to dispute credit report errors to the respective credit agencies. It appears that the quickest and most effective way of disputing information is to do it online. Below are instructions for disputing the claims with each of the 3 credit bureau agencies:

All of your credit history is contained in a document called a credit report or credit record.

Everyone is allowed to get a free credit report from each of the three main credit bureaus every 12 months. The Web site at www.AnnualCreditReport.com lets you securely get your free credit report once a year from each of the three nationwide credit bureaus.

Depending on who you ask you get a different answer in regards to how long negative information stays on your credit report. So we did some research and here is what we found from Equifax (one of the largest 3 credit bureaus):

Nothing you do–even making payments–can affect the amount of time negative information stays on your credit reports.  In general, negative information that is more than 7 years old (10 years for bankruptcies) from date of last activity should not be present on your credit report. More specifically,

On a previous article we discussed what is included in your credit report. Given that we still get a lot of questions whether certain things are included in your credit report, let us tell you what in NOT included.

A credit report does NOT include the following information:

The information that is contained in your credit report can be categorized in 4 groups: Personal Information, Credit History, Credit Inquiries, and Public Records.

Personal information: Your Name, Date of Birth (DOB), Current & Past Addresses, Name of Current & Past Employers, and Social Security Number (SSN).

The whole idea behind credit is the ability to either spend money you do not have, or money you do have but would rather use for a different purpose.

Your credit report / credit history is the record of how you have used your credit. Basically, it tracks your payments on most things that you are issued credit for. This includes your monthly payments for many types of bills: credit cards, car loans, mortgages, student loans, and even cellular phones.