investing guide

Credit Reports - FICO Score Ratings

credit reports

Credit reports and FICO score ratings are two things in life that can have a huge impact on your financial and investing needs. While they can help you get credit for investments such as home and car loans they can also be a big headache when incorrect information is included in them.

There are 3 major Credit Reporting Agencies TransUnion, Equifax, and Experian. This alone is my first problem with our crediting reporting system. All 3 of these credit reporting agencies work independently which means they all can contain different credit information. This is because companies that you receive credit from may only report to certain agencies. So what this means is that you will more than likely have 3 different FICO scores.

What is a FICO score?

FICO scores are the main source that lenders use to judge your creditworthiness. Your main goal is to try to keep your FICO score above 700 from all three Credit Reporting Agencies. This will insure you are getting the best interest rates when you are using your money for investing.

The easiest place to receive all three FICO scores is from their website myFICO.com. This is the only place you can get a "true FICO score." The 3 Credit Reporting Agencies offer their own version of a credit score, but they are not your actual FICO scores that lenders will be using.

So what if your score is below 700?

Well myFICO.com will give you explanations as to why your scores may be low and how to potentially raise them. Also you need to make sure the items they show that are negatively affecting your FICO scores are accurate. It is against the law for a creditor to report false information about you. However, with that being said it is very difficult sometimes to get information on your credit report changed.

Each of the Credit Reporting Agencies allows you to file a complaint if you feel information on one of your reports is wrong. However, proving this and getting them to fix it in an efficient manner is, well to say the least, one of the most irritating experiences to go through. This is because the 3 Credit Reporting Agencies simply take a creditors word about your information for the most part. Even if you send proof you feel validates your point. The agencies still simply contact the creditor you have a dispute with and if that creditor says the information is correct you are out of luck. You can keep sending in more documentation and try calling the creditor themselves, but you will simply get annoyed and angered when the incorrect information remains on your credit report.

I had one major run in with a large bank about incorrect information they reported on one of my credit reports. This information hurt my score badly and was completely inaccurate. I spent about 3 months going back and for with the bank and the agencies trying to get it corrected. I sent tons of proof and documentation still nothing for months.

So how did I get the situation resolved?

I used a very out-of-the-box approach. I looked at it this way. These people were irritating me so I decided to irritate them.

First, I went to the company's website and started gathering email addresses from every department I could find regardless of their connection to my situation. I then proceeded to send them emails everyday explaining how their company was breaking the law by reporting false information. I stated that I would continue to send them emails every day until the end of time unless they corrected their mistake.

Secondly, I sent the CEO of this large corporate bank a certified letter, which means someone had to sign for it, explaining my situation with all my documentation. I again stated that I would send him a letter every week until the end of time itself unless my situation was resolved.

Within ONE WEEK of sending that letter my credit report was instantly fixed! I also received a letter of apology from the bank.

Just remember this only worked because I was 100% sure I was correct. If you have missed 6 mortgage payments do NOT think a creditor is going to remove the negative information. A creditor has the right to report accurate information.