Entrepreneurship Wednesday: 4 Credit Reporting Myths

I have decided to revisit my goals to own a home.  My current lease is up on my apartment in June 2011, so I plan to begin house hunting in January 2011.  First thing is to check your credit to make sure there aren't any fraudulent charges, cards closed, and to ensure you are achieving a certain score.

Your credit report and score can hold the key to your financial future. One mistake could possibly prevent you from getting a loan or an apartment. It’s important to understand what’s in your report and how it affects you. Here are some common myths about credit reporting.

Myth: You can pay someone to make bad things on your report “go away.”

Reality: Services like this are more than likely a scam. According to the Federal Trade Commission, their attorneys say that they have never seen a legitimate credit repair company making claims to remove bankruptcies, erase bad debt, or create a new credit identity. Any company that claims they can do this is lying to you. The FTC says you can spot one of these scams by looking out for some of these red flags:

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they promised.
• The company doesn’t tell you your rights and what you can do yourself for free.
• The company suggests that you try to invent a “new” credit identity—and then a new credit report—by applying for an Employer Identification Number to use instead of your Social Security number.

Myth: Employers can see your credit score.

Reality: Employers don’t have access to your credit score, only your report. If you’ve given written permission for an employer to do a background check, the package they receive will include information about your financial history. Employers receive a modified version of your credit report (known as an employment report) from the three major credit reporting agencies, which doesn’t include your score. If you find out that you didn’t get a job because of information in your credit report, the employer is obligated to show you the report and tell you how to get your own copy. Your report is free of charge if you make a request within 60 days of getting a rejection notice from an employer.  

For the rest of this article visit Black Enterprise.

Keep the Faith!

Until next time,
~E