5a 
This stop on our journey takes us to a place that all of us have
heard of and most of us could use more information about. Credit
Reports and Credit scores. One study showed that only 2 percent
of Americans knew their credit score and only 3 percent could
name the credit bureaus. Knowing the contents of your credit
report and knowing your credit score are both important and will
help to put you in control. Let's start by taking a look at why credit
reports and credit scores are important to us. In the last unit, we
saw the impact that your interest rate has on the amount that you
pay for a loan. So, how do lenders decide what interest rate to
charge?  Lenders actually use three things: your credit report,
your credit score, and their own standards to determine your
interest rate-- and really whether they'll give you a loan at all! 
Your credit score is based on what's in your credit report. And
your credit REPORT contains information about your credit
history. This includes the credit you have or have applied for, how
much you owe, and how promptly you've paid.  Each one of us
has the power to control what kind of interest rates we can get on
loans, because it's our financial behavior that determines whether
our credit report and score are good or bad!  The main thing to
remember in this unit, and throughout this entire course, is that
we do have the power to change our financial situation. And that
includes our credit report and our credit score. A huge amount of
information is collected about each one of us. But WE can control
the accuracy of that information.  Credit Reports are like a report
card of your financial behavior. So who's giving you these report
cards and what kind of information do they include?  Your credit
report is one of the things that lenders use to determine whether
they'll give you a loan and what they'll charge you for it.  There
are 3 traditional Credit Reporting Agencies, or CRAs. They are
Equifax, Experian and Trans Union. There are other companies
that get information from the "big 3," repackage it, and resell it,
but these three are the only traditional Credit Reporting Agencies.
Credit reporting is voluntary. That means lenders don't have to
report your information to the CRAs. And not all do. Many of the
bills you pay on time usually aren't reported. Things like rent,
utilities, alimony and taxes. So what is included in your credit
report? Let's take a look.  Our credit reports contain personal
information like name, Social Security number, address and prior
addresses. They may contain work history and a telephone
number. Of course, credit reports also contain information about
our credit behavior. Things like when the account was opened and
closed, available credit limit, the balance, and whether the
account is paid on time.  They also contain accounts that have
been placed with collection agencies and public records such as
legal judgments. Finally, credit reports list the companies that
have requested your credit report, and when they did so. These
are called "inquiries."	  Everyone in America is entitled to one
FREE copy of his or her credit report every year. That's one free
copy from each of the three CRAs. But be careful! There's only
one way to be sure that you really WILL get your report for free,
and that's by going through what the three CRAs call the "central
source".  The Central Source was created by the CRAs to comply
with the “Credit report" law.  You can contact the Central Source
through its Internet address, www.annualcreditreport.com or call
1-877-Fact Act. One smart way to use the Central Source is to get
a free credit report from a different CRA every four months. This
way you space your 3 free credit reports out over the year so
you'll have early warning of any fraud or Identity theft. The web
sites of the big 3 have a lot of helpful information, but watch out.
These are for-profit companies, so they're also trying to sell you
things that will make them money. One thing they'll try to sell you
are credit-monitoring services. These services are expensive, if
you feel you're at risk of fraud or identity theft, instead of buying
an expensive service, you can have a freeze put on your file.  You
should monitor your credit report regularly.  But are credit reports
always accurate? Studies show that 70% or more of all credit
reports contain at least one error. Information that's wrong, items
that shouldn't appear, or items that should appear but are
missing. That's why it's important to correct your credit report.
The power of CAR - That's C, A, R, which stands for: Correct, Add,
and Remove. You may need to be persistent, but you have the
legal right to have errors on your credit report corrected. Not
everything is allowed on your credit report. Most negative items
that are older than 7 years must be deleted.  Bankruptcies can
appear for 10 years, but the Credit Reporting Agencies have
voluntarily agreed to remove chapter 13 bankruptcies  7 years
after your discharge. You have the right to have outdated items
removed from your credit report but it is beneficial to have only
the negative items removed not positive items. The Fair Credit
Reporting Act as amended by the Fair and Accurate Credit
Transactions Act is federal law that tells us what our rights are
pertaining to credit reports. This law governs who is allowed to
get our credit reports and under what circumstances. And the Fair
Credit Reporting Act gives consumers rights to have error
corrected. You also have the right to add a "consumer statement"
to your credit reports. You can write a 100-word statement telling
your side of any credit dispute. This will appear until the matter is
resolved. Of course, this video is not intended to give you legal
advice, you can only get legal advice from a licensed attorney in
your State.  We have the power to correct our credit reports. It's
definitely worth the effort to make sure your credit report is
accurate.  So check for errors, and Correct, Add and Remove your
way to accuracy.  A great source of information about your
consumer rights is the Federal Trade Commission's web site.  Each
CRA also has information about how to correct an error and offers
some educational materials on their web sites.