About Credit Scoring:

There are 3 credit reporting agencies in the United States. Each maintains information about you and your credit history. This information is gathered on an ongoing basis from many sources that have extended you credit.

What Information is Included?

Personal information. Compiled from credit applications you've filled out, this information normally includes your name, current and recent addresses, Social Security Number, date of birth, and current and previous employers.

Credit history. The bulk of your credit report consists of details about credit accounts that were opened in your name or that list you as an authorized user (such as a spouse's credit card). Account details, which are supplied by creditors with which you have an account, include the date the account was opened, the credit limit or amount of the loan, the payment terms, the balance, and a history that shows whether or not you've paid the account on time. Closed or inactive accounts, depending on the manner in which they were paid, stay on your report for 7 to 11 years from the date of their last activity.

Inquiries. Credit reporting agencies record an inquiry whenever your credit report is shown to another party, such as a lender, service provider, landlord, or insurer. Inquiries remain on your credit report for up to two years.

Public records. Matters of public record obtained from government sources such as courts of law -- including liens, bankruptcies, and overdue child support -- may appear on your credit report.

What Factors Affect a Score?

Many different formulas are used to calculate credit scores, but most are based on the following factors, which each scoring model weighs differently:

Payment history. (35%) A record of late payments on your current and past credit accounts will lower your score. Always pay by the due date!

Amount owed. (30%) Owing too much will lower your score, especially if you're approaching your total credit limit. Try to maintain a balance no more than 25% of your credit limit.

Length of credit history. (15%) In general, a longer credit history is better.

New accounts & Inquiries. (10%) Opening multiple new accounts in a short period of time may lower your score. Whenever someone else gets your credit report -- a lender or landlord for example -- an inquiry is recorded on your credit report. A large number of recent inquiries may lower your score.

Accounts in use. (10%) The presence of too many open accounts can lower your score, whether you're using the accounts or not.

Public records. Matters of public record such as bankruptcies, judgments, and collection items can also dramatically lower your score.

Facts and Statistics about Identity Theft –

More than 27 million Americans have been victims of identity theft in the last five years.... To deal with the problem, consumers reported nearly $5 billion in out-of-pocket expenses -The New York Times

"Stealing someone's identity to acquire -- and use -- new credit cards has become one of the most popular white-collar crimes today, according to fraud investigators from across the country." -Knight Ridder/Tribune Business News

"This year alone more than 500,000 Americans will be robbed of their identities…with more than $4 billion stolen in their names." -CBSnews.com

"In one notorious case of identity theft, the US Department of Justice reported that the criminal incurred over $100,000 of credit card debt, obtained a federal home loan, and bought homes, motorcycles, and hand guns in the victim's name all the while calling his victim to taunt him." - US Department of Justice Web site

"The number of identity thefts in the U.S. has skyrocketed during the past 15 months."
-CNN.com

"According to a convicted ID thief in Denver, CO, "On a good day I could make $5,000 in cash and another $7,000 to $8,000 in merchandise..." -CBSnews.com

"A recent report on identity theft warned that there is likely to be "mass victimization" of consumers within the next two years. The report said consumers should be extra careful to monitor all their financial transactions for unexplained account activity, withdrawals, or fund transfers." -The Gartner Group, a technology research group

"Every 79 seconds, a thief steals someone's identity, opens accounts in the victim's name and goes on a buying spree." -CBSnews.com

"Experts report that a victim can spend anywhere from six months to two years recovering from identity theft." -CNNfn.com

"Most people don't find out they have been a victim of a stolen identity until they are turned down for a loan or credit card. A copy of their credit report explaining the denial may unveil weeks or months of fraud." -CNNfn.com

Protect Your Identity... FREE Subscription to Equifax Credit Watch

Fixing Errors on Your Report

It’s possible for incorrect, incomplete or outdated information to appear on your credit report. If it does, it can drastically lower your chances of getting the loans, credit cards, and other credit products you deserve. If you find an error, take the following steps to fix it as soon as possible. If you see evidence of fraud, contact the credit reporting companies immediately. Explain the situation and ask that a fraud alert be placed in your file. Also report the fraud to the police, and your creditors.

Please note: It's important to keep a record of everything you do. Send all correspondence return receipt requested, and make copies of any letters or documents you send. Never send original documents.

1. Contact the credit reporting company

Contact the credit reporting company that is reporting the item in question. You will need a printed copy of your credit report from them, which you may be eligible to receive free of charge.

After you send written documentation of the inaccuracy, the credit reporting company will review it. If further investigation is required, they will provide notification of your dispute, including the relevant information you submitted, to the source that furnished the disputed information to them.

The source will then review the information, conduct their own investigation, and report back. The credit reporting company will then make all appropriate changes to your credit file based on the investigation, and notify you of the update.

2. Contact the Creditor Regarding the Problem

In some cases, you should contact the appropriate creditor or lender before contacting a credit reporting company. This is especially true if you are a victim of fraud. You should also contact the appropriate creditor or lender if that source has verified the information that you disputed with the credit reporting company. Most large creditors have standard procedures for customers to dispute items on their account. If you have proof that the item in question is incorrect, it should be resolved quickly.

If the creditor finds that the disputed information is indeed incorrect, the creditor is required under the Fair Credit Reporting Act to update its records both internally and with the credit reporting companies it deals with, usually within 30 days. However, some small creditors that do not regularly report information to credit reporting companies are not required to notify the agencies of the corrected information. In these cases, you will need to contact the agency directly.

Always follow up your phone calls with a letter. List each disputed item, and state how it is inaccurate, attaching copies of all relevant documents. Include your full name, account number, the dollar amount in question, and the reason you believe the item is wrong. Be concise.

3. Contact the Other credit reporting companies

If you find an inaccuracy with one credit bureau, you may want to get your credit report from the other two agencies to see if their reports contain the same error. After you've corrected an error with one agency, the other agencies will in most cases also receive the corrected information. But for prompt correction, it's best to contact each of the three major credit reporting companies yourself.

4. Ensure the Error Is Fixed

Within 30 days (45 days if based upon your annual free credit file), the credit reporting company should notify you of the results of its investigation and provide you with a new credit report free of charge. Examine it carefully to ensure that the inaccuracies have been fixed or removed.

If the error has been fixed, you can have the credit reporting company send the corrected report to anyone who received the inaccurate report in the past six months (two years in the case of employers).

5. If You Cannot Resolve a Disputed Item

You have the right to file a brief statement with the consumer reporting agency, free of charge, explaining the nature of your disagreement. The consumer reporting agency may limit your statement to not more than 100 words if it provides you with assistance in writing a clear summary of the disagreement. Your statement will become part of your credit file, and will be included each time your credit file is accessed, for as long as the disputed item remains in your credit file.

Contact information for the three major credit bureaus

Equifax - P.O. Box 740341 Atlanta, GA 30374 1-800-685-1111 www.equifax.com

Experian - P.O. Box 2002 Allen, TX 75013 1-888-397-3742 www.experian.com

Trans Union - P.O. Box 4000 Chester, PA 19016 1-887-2673 www.transunion.com

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