A mathematical formula is used by the three different credit bureaus located in the United States of America in order to help determine an individual’s worthiness when it comes to credit. This is, in turn, used in order to determine how much money an individual might receive when it comes to a loan or whether or not they are worthy of receiving something such as a rental apartment or home in which to live. The newest way to measure credit is using the FICO system. Using this system, an individual can have a credit score that falls within the range of 350-850. In your credit report, your previous actions are calculated in order to make up specific percentages which make up your total credit score.

Credit Inquiries: 10% - This does not include your personal inquiries of your own credit report.

Types of Credit Used: 10%

Credit History Length: 15%

Debt to Income Ratio: 30%

Payment History: 35%

All of the loans, debt, credit cards and billing accounts that you have should be included on your credit report. You can get a feel for how good or bad your credit score is by looking at you credit inquiries, credit used (typically either revolving or installment), length of time that you have been building up your credit, your debt ratio (which looks at how much money you are bringing in as an income and how much money you are spending as debt) and the history of the payments that you have made/are making.

Not all things stay on your credit report forever. While these old factors can often be accessed, most of the time companies or individuals who are making inquiries about your credit are not going to look that far back, beyond the current credit page. Bankruptcies, in the United States, are on an individual’s credit report for seven years. Typically, after this time, the bankruptcies will not be easily visible any more. Even though these things may not be on a person’s credit report seven years later, there is the chance that the information will be factored into their overall credit score.

You may be initially nervous about writing a credit dispute letter. Of course, you want it to sound professional, but you do not want it to come off as pretentious. By using plain language and being honest, you can easily and quickly whip up a respectable and effective credit dispute letter.

Get the Address for the Complaint Department:

In order to make sure that your letter does not get passed around from department to department, address the letter to the complaint department within the credit bureau that you are contacting. This is a quick and easy way to speed up the process of your letter and your complaint getting addressed by the credit company.

Know the Format for a Business Letter:

There is a formal way to write a business letter. This includes your contact information and date on the upper right hand portion of the letter, the company’s information on the left hand side underneath the lines used for your contact information and the body of the letter following the common phrase “To Whom it May Concern:”. In order to help with this, there are a number of business letter templates online you can locate using your favorite search engine and the phrase “business letter template” or “credit dispute letter template”. Try looking at Microsoft’s® community sample letter at http://office.microsoft.com/en-us/templates/TC300005241033.aspx.

Include a Copy:

Make sure to add a copy of your credit report to your letter packet. Do not include the original credit report because if the mail gets lost, you may not get it back. This will also make sure that the complaint department can see what you are concerned about in the report.

In the Body…:

Don’t be vague in your letter. Make sure that you include the specific concerns that you have. In your packet to the complaint department, make sure to include a copy (NOT THE ORIGINAL) of your credit report. Highlight, circle or otherwise mark the concern that you have on the copy of your credit report so that the complaint department can easily identify and locate your concern on your credit report.

Credit disputes are more common now due to the increase in identity theft and identity fraud. While these occurrences are not at all considered to be mandatory for a credit dispute, they do make up a discernable amount of credit disputes that are submitted and reported. Nonetheless, whether a person is disputing their credit due to identity theft, identity fraud or the individual’s simple belief in an error having been made, the process for disputing the credit reporting is the same.

There are three credit bureaus in the United States of America to which individuals can dispute credit aspects of their report. Some people prefer to send disputes to all three of the credit bureaus, but this is not always necessary. In the event that a person has a dispute, they need to contact their chosen credit bureau(s) on which they see the disputed item. Here are the following contact information links and numbers that you will need in order to dispute an aspect of your credit report.

Equifax:
Phone: 800-685-1111
Website: www.Equifax.com

Experian:
Phone: 888-EXPERIAN
Website: www.Experian.com

TransUnion:
Phone: 800-916-8800
Website: www.TransUnion.com

For credit disputes, you need to have a recent credit report and credit report number, which is a number on the top of your credit report, used to identify the report. Typically this report needs to be dated within 90 days of your credit report dispute filing. You can get a free credit report – liegitmately free and not a trial version – from www.AnnualCreditReport.com. One free credit report from each of the three bureaus is permitted each year or every twelve months.

Let the credit bureau know in writing what you think is inaccurate on your reprt. Send letters to the creditor to the same effect as well. When you send a letter to the creditor(s) include a copy of the affected items on your credit report. Remember to include COPIES and not the ORIGINALS of the credit report.

When it comes to filing for bankruptcy, it is very common for individuals to include their credit cards in their filing. While this is great for individuals who are actually in need of financial assistance, some people actually decide to file for bankruptcy and then charge up a storm on their credit cards, intending for the card to be included in their filing. However, if they are caught in this scheme, they can be taken to court by the lender and found guilty of defrauding their lender(s) – that is, that the individual had no intention of paying back the lenders after or when they borrowed money.

In order to make sure that you are not accused of defrauding the credit card companies that you are involved with, it is best not to make any large purchases on your cards for ninety days prior to filing for bankruptcy. It may be tempting to go out and make an impulsive, expensive purchase the night before filing for bankruptcy, but you will almost always be caught and charged. Cash advances totaling more than $750 or luxury purchases over $500 in a ninety day time period before filing for bankruptcy are suspect.

As soon as you decide that you are going to file for bankruptcy, this is the time to stop using your credit cards. You will only be further compounding your debt. If you are involved in debt that you won’t be able to get out of, stop spending and stop using your credit card! If you have to use your card even after you have come to the decision to file for bankruptcy, you will HAVE to stop at the next logical point. After you go to a bankruptcy lawyer, do NOT use your credit card! If you are found to have used your credit card after going to see a bankruptcy lawyer this can get you in serious and substantial trouble. This is clear evidence that you were intending to defraud the credit card company.

There are a few different credit report sites in the vein of www.freecreditreport.com and www.truecredit.com that offer what they advertise as free access to see your credit reports. The truth is the access is not free as much as it may seem at first glance. You, as a user on their sites, will actually have to register with the site and submit your own personal credit card information at the start of your free trial session. If you do not cancel within a certain amount of time, you will get charged for the use of the site. Even though some of these sites are going so far as to put ‘free’ in their domain name, they aren’t really free if you use them for more than 7 days or so.

Whether or not you see this as a scam is in the eye of the beholder. Some people may not have a problem with supplying their credit card information, even if they do so just to use the site for a supposedly free trial. Other people may not want to give out their information. Some people don’t want to give away the information because it is private and they may question the security of web sites in general, but other people are concerned that they may not cancel their trial in time. Some people may inadvertently end up paying for one month (or more!) of the ‘free’ credit report site if they do not pay strict attention to their trial period. Even being just a little bit late to cancel means that you are late and you will have to pay.

Some sites are easier to cancel than others, which can add to the stress of these sites. In some cases, people can simply send an email in order to cancel their membership. Other sites require their customers to call in order to cancel the subscription. These credit report sites may not be attractive to people who don’t feel they need to know their credit status on a consistent basis; for those who do, such sites can save them time and money!

The Federal Trade Commission has made information available on their website which advises that consumers are due a free annual credit report from the three major credit bureaus. This true free credit report site can be found at www.annualcreditreport.com. Keep in mind – the report is only free once every twelve months. If you need your credit report to glance at occasionally just to make sure everything is in order, this is a great option.