NEW YORK, NY / ACCESSWIRE / June 15, 2023 / Credello: Your credit score can have a huge impact on your life, from being able to rent an apartment to passing an employer background check. A package of bills to address credit rating regulations in New York is aiming to change that. Lawmakers want to prevent employers from using a credit report to make hiring decisions. They also want to protect domestic violence survivors who have gone through financial abuse.
The measures would also require consumer reporting agencies to contact you if an inquiry is made into your report, as this can affect your credit score, as well as provide improved awareness around understanding your credit report. It’s too early to tell whether this regulation will become a reality, but, as a consumer, you can get your free credit report from each one of the credit bureaus and use it as a tool to protect your credit health.
“The credit score system has a long way to go before it works for consumers rather than against them,” said Assemblywoman Nily Rozic, the chair of the Assembly Consumer Affairs and Protection Committee, in a Spectrum News article. “This legislative package is a step toward ensuring New Yorkers are equipped with the information and protections necessary. In New York we know that poor credit reflects a broken financial system, not a judgment on the consumer.”
How does a credit report work?
A credit report is a detailed summary of an individual’s credit history and financial behavior. It is compiled by credit bureaus based on information provided by lenders, creditors, and public records. The report includes various elements such as personal identification details, credit accounts, payment history, outstanding debts, and public records like bankruptcies or tax liens.
Credit reports play a crucial role in assessing an individual’s creditworthiness and financial reliability. Lenders and creditors refer to these reports when making decisions about granting loans, credit cards, or other forms of credit. They use the information to evaluate the individual’s ability to repay debts and manage credit responsibly.
A credit report provides insights into an individual’s financial habits, including their payment patterns, debt levels, and overall credit management. It influences a person’s credit score, a numerical representation of their creditworthiness. A good credit report with positive payment history and low outstanding debt typically results in a higher credit score, while negative information or late payments can lower it.
Accessing and reading your credit report
Monitoring your credit report regularly is important to ensure accuracy and identify any errors or fraudulent activity. To access your credit report in the U.S., you can visit AnnualCreditReport.com, the official website authorized by the Federal Trade Commission. There, you can request a free credit report from each of the three major credit bureaus-Equifax, Experian, and TransUnion-once every 12 months. Simply provide your personal information, choose the credit bureaus you want reports from, verify your identity, and you’ll be able to view and download your credit reports instantly.
If you’re wondering how to read a credit report, the first step is understanding the information presented. Here’s a simplified guide:
- Personal Information: Verify your name, address, and social security number for accuracy.
- Accounts: Review each account entry, noting the creditor, account type, and status (open, closed, etc.).
- Payment History: Check if payments were made on time and identify any missed or late payments.
- Balances and Credit Utilization: Assess the outstanding balances on your accounts and calculate the percentage of credit used.
- Public Records: Look for any bankruptcies, liens, or judgments against you.
- Inquiries: Note any recent inquiries made by lenders or creditors.
- Dispute Errors: If you find any inaccuracies, follow the credit bureau’s instructions to dispute them and ensure a correct credit report.
Understanding your credit report helps you evaluate your creditworthiness, detect errors, and take appropriate steps to maintain or improve your credit health.
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