Building a better credit record

Newspapers, radio, TV and the Internet are filled with advertisements that offer -- for a fee -- to erase accurate negative information in your credit file. The scam artists who run these ads can't deliver. Only time, a deliberate effort and a plan to repay your bills will improve your credit record.

The process of checking on and repairing your record starts with understanding some basics about credit reporting agencies and credit reports. A previous column reviewed common questions and answers people have about these matters ("Credit report Q&A," FCW.com, Dec. 7, 2001), and this column is the first in four-part series that examines how to repair your credit record, how to deal with debt and how to avoid scams.

What's in the Report?

First, you should know that CRAs - most commonly a credit bureau -- collect and sell four basic types of information:

* Identification and employment information: Your name, birth date, Social Security number, employer and spouse's name are routinely noted. The CRA also may provide information about your employment history, home ownership, income and previous address, if a creditor requests this type of information.

* Payment history: Your accounts with different creditors are listed, showing how much credit has been extended and whether you've paid on time. Related events, such as referral of an overdue account to a collection agency, also may be noted.

* Inquiries: CRAs must maintain a record of all creditors who have asked for your credit history within the past year, and a record of those persons or businesses requesting your credit history for employment purposes for the past two years.

* Public record information: Events that are a matter of public record, such as bankruptcies, foreclosures or tax liens, may appear in your report.

Know Your Rights

The Federal Trade Commission enforces several credit laws and provides consumers with free information about them:

* The Equal Credit Opportunity Act prohibits the denial of credit because of your sex, race, marital status, religion, national origin, age or because you receive public assistance.

* The Fair Credit Reporting Act gives you the right to learn what information is being distributed about you by credit reporting agencies.

* The Truth in Lending Act requires lenders to give you written disclosures of the cost of credit and terms of repayment before you enter into a credit transaction.

* The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit card accounts.

* The Fair Debt Collection Practices Act prohibits debt collectors from using unfair or deceptive practices to collect overdue bills that your creditor has forwarded for collection.

Next Week

How to improve your credit report.

Zall, Bureaucratus columnist and a retired federal employee, is a freelance writer based in Silver Spring, Md. He specializes in taxes, investing, business and government workplace issues. He is a certified internal auditor and a registered investment adviser. He can be reached at milt.zall@verizon.net.