The Role of Credit Reporting Agencies

In today’s financial world, our credit score is relevant, especially when we make significant transactions; from buying a house to insurance on our vehicle, having a good credit score is not only essential but has to be proven. This is usually an overlooked topic, so we’re sharing valuable information in this article.

The Role of Credit Reporting Agencies

There are three main agencies in the United States: Equifax, Experian, and TransUnion. These agencies keep individuals’ credit records, and they can be accessed using a social security number and, in some cases, with a tax ID. These agencies are consulted by lenders and employers to verify a person’s creditworthiness.

How Does Credit Work?

Every time a credit transaction is made, it is reported to the credit bureaus. If you meet your financial obligations, your credit score will improve. Conversely, failure to do so can result in a low score, reflecting negatively on your ability to manage your finances.

Consumer Rights

By law, you can request a free copy of your credit report once a year from any credit reporting agency. This report will include details such as credit cards, mortgages, loans, etc. If you find errors, you have the right and the established process to correct them.

The Importance of Accuracy in the Credit Report

Your credit report must be accurate. If the disputed information cannot be verified, the credit agency must remove it. If the information needs to be corrected or completed, it must be done accordingly.

Handling Negative Information

Negative information (but correct) can remain in your history for up to 7 years, with some exceptions, such as bankruptcies, which can stay for 10 years. In cases of criminal convictions or certain high-paying jobs, there is no time limit.

In Case of Social Security Number Loss

If you lose your social security number, it is imperative to notify the credit agencies immediately, request a credit report, and ask for your number to be monitored to prevent fraudulent use of your identity.

Credit is an integral part of our financial lives. It is essential to maintain a good credit history and regularly check your credit report to ensure everything is correct. If you have any questions or need assistance, you can consult resources like the Federal Trade Commission, which offers guides on credit in Spanish and English.

Remember, you can check your credit for free once a year. Stay informed and in control of your financial health. If you have questions or need legal advice, do not hesitate to contact us at Abogados Centro Legal at 205 940 2233 or schedule your free consultation.