Posted by : Amanda Stein Thursday, September 13, 2012

While there are many myths and misnomers regarding the whole credit field, a few commonly believed myths regarding credit reports and credit scores prevail. One pertains to the two subjects are identical but spelled differently. From that point, additional misunderstandings stem and grow with lives of their own.

First Myth: Credit Report v Credit Score

Your credit report is a history of your credit accounts and how you pay them. It also displays at the bottom who has peeked at your credit report lately, and if you examine those entries, some may not have done so at your request – in response to a credit application, for example.

Should you find unknown or unsolicited entries there, the reporting agency is not your source: Contact those organizations for justification. If they pulled a report as an associated organization from the potential lender to whom you did apply, simply breathe and let it go. If it's still unknown, you night contact the Federal Trade Commission and file a complaint: They received your information from someone or something.

Your credit score is the unique formula sum reached from values assigned by each credit reporting agency or CRA to your types of credit and each credit entry. All three major reporting agencies may not allot the same numerical value to the same entry on your credit report. Because the values can differ, one credit report from each agency and reflecting the same credit histories can result in three different credit scores.

Before you apply for any type of loan at an institution or business that examines both a credit score and your credit report, always ask which CRA is used.

Second Myth: The CRA Responsibilities

So many people mistakenly believe that a credit reporting agency is responsible for the entries that do and do not appear on your credit report. The type of organization – a credit reporting agency – doesn't create entries. They simply report what information they are provided by creditors.

If an entry is incorrect, first contact the creditor to ensure your records match. If the reported entry is inaccurate, the creditor must adjust its notation on the credit report. Should that organization fail to do so, you can file a dispute the entry by submitting your entry rebuttal to the CRA. However, that will not correct the data: Your explanation or dispute is just noted on the report with the credit entry itself.

Third Myth: The CRA Determines Entry Duration

Often in tandem with the second myth, credit reporting agencies do not remove entries or determine how long one stays on your credit report. If a long- or short-term loan for which you had four late payments but fully paid 15 years ago is still present, you can request it be removed, based on the Federal Trade Commission's statutory duration of types of credit information on a credit report.

If a credit entry is favorable, you might allow it to remain indefinitely. There is no harm in having it there. If, however, an entry is not favorable, consider requesting it be removed as soon as US law allows. Be aware, though, that not all lending entities check credit reports or scores but base all interest rates on shared risk-based figures.

Written by Jaye Ryan, a freelance author who loves writing about credit issues and credit management for

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