Tuesday 31 January 2012

How Does One Build A Credit Report?

By Kurt Almer


If you're denied a loan or Mastercard because you have no credit report, consider establishing one. The right way is to apply for a little line of credit from your bank or a Visa card from a local dep. store. Make sure you list your best fiscal references. Send payments continually and make certain the creditor reports your credit report to a credit bureau.

If your partner dies

Under the Equal Credit Opportunity Act (ECOA), a creditor can't instantly close or change the details of a joint account solely because of the death of your partner. A creditor may ask you to update your application or reapply. This may happen if the account was originally based on any part of your spouse's revenue and if the creditor has reason to believe your income alone can't support the credit line.

After you submit a re-application, the creditor will determine whether to extend you credit or change your credit limits. Your creditor must respond in writing inside 30 days of receiving your claim. In that time, you can continue utilizing your account with no new limitations. If you are application is rejected, you must be given precise reasons, or told of the right to get this info.

These protections also apply when you retire, reach age 62 or older, or change your name or marital status.

Categories of accounts

It's crucial to know what sort of credit accounts you have, especially if your other half dies. There are 2 types of accounts - individual and joint. You can permit authorized folks to use either type.

An individual account is opened in one person's name and is based only on that person's income and assets.

If you are worried about your credit status if your spouse should die, you might need to try and open a few individual accounts in your name. That way, your credit status won't be affected.

When you are signing up for individual credit, ask the creditor to consider the credit score of accounts reported in your spouse's or former spouse's name, as well as those reported in your name. The creditor must consider this info if you can prove it reflects certainly and exactly on your ability to manage credit. As an example, you may be able to show thru canceled checks that you made payments on an account, even though it's listed in your spouse's name only.

A shared account is opened in two people's names, regularly a husband and better half, and is based on the income and assets of both or either person. Both folks are accountable for the debt.

Account "users"

If you open an individual account, you may authorize another person to use it. If you name your spouse as the permitted user, a creditor who reports the credit score to a credit office must report it in your spouse's name as well as in yours (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of another authorized user.

If you're refused credit

The ECOA does not guarantee you'll get credit. But if you're denied credit, you have the right to find out why. There could be a gaffe or the computer system may not have evaluated all important info. If that is so, you can ask the creditor to reconsider your application.

If you think you've been discriminated against, you might want to pen to the Fed. agency that manages that particular creditor. Your complaint letter should state the facts. Send it, along with copies (NOT originals) of backup paperwork. You also may want to contact a solicitor. You have got the right to sue a creditor who violates the ECOA.

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