Even after you change deodorants, invest in mouthwash, and sign up for a class on how to develop your self-esteem, you find that more and more businesses avoid you and that it's more and more difficult to obtain a job or a home or apartment. What's wrong? The problem could be your credit report, not your personal hygiene. Even if you paid all your bills on time and rectified any possible problems with parent companies, your credit report could reflect activities that you've forgotten or reveal problems that were created by someone else. How do you repair your credit? How long does it take?

Credit bureaus can reveal your credit accounts, your employment, and your residences over a period of three to ten years or more. This report is a biography of your financial and physical lifestyle, and everyone from employers to loan agencies can access this report to make decisions about your future.

For instance, the Equifax report lists your legal name, residence(s), Social Security number, employment, public information like judgments, liens, and marital status. It also displays your history through such items as late payments, account balances, whether the account is active or closed, and a list of recent inquiries into your credit history. Inquiries about your information can come from credit card companies who want to know if you're worth the time, effort, and money to contact in a mass mailing, to a banker who wants to know if you're worth the time, effort, and money to offer a loan for that new house or car. Since the information about your credit history changes on a daily basis, you might see how timing could alter your plans, as well as any mistakes made by companies who report your business to credit bureaus in the first place.

While others may make errors, it's up to you to make sure that those mistakes are rectified. For instance, say that you were affected by Hurricane Katrina, and your bills are lost in a hopelessly mired Post Office delivery problem along the Gulf Coast. Although most companies are aware that former Gulf Coast residents may not receive their bills, they hire employees to log late or missing payments into your file. It is your responsibility, therefore, to contact that company to make arrangements for bill payment. Further, it is your responsibility to check your credit rating to make sure that this company removes any negative reports made to a credit bureau about your credit as well.

You can log onto the Federal Trade Commission's (FTC) website to learn about how to order both free and "for pay" credit reports and about how to dispute and/or rectify your credit ratings. The FTC gives vital information about how you can tell the consumer reporting company, in writing, what information you think is inaccurate. The FTC even offers a sample letter that you can follow when writing to the credit bureau, how to send the letter, and what to include.

While the FTC states that reporting companies must investigate items in question and respond to you unless the request is deemed frivolous, the results may take longer than the 30 days that the FTC suggests. As more individuals request their credit reports and dispute items found on those reports, the wait time could take up to three months or more. Accordingly, the corrections may take months or years to correct, especially if your dispute is countered by the company that gave the credit bureau the questionable information.

This wait time is what makes mistakes and identity theft so unforgiving. Even if you've been particular about your credit rating, you may fall into a dispute that seems unreasonable and unfair and that may take years to erase. This is one reason why credit and loans should take a back seat to cash whenever possible, and why it's important to keep a diversified portfolio. If you have cash on hand, or if you have liquid savings among your long-range investment plans, you can tap those assets to continue on with life while you correct problems that occur along the way.

The FTC site also recommends and warns readers about adding accounts to your credit file. They state that, "Although most national department store and all-purpose back credit accounts will be included in your file, not all creditors supply information to consumer reporting companies: some travel, entertainment, gasoline card companies, local retailers, and credit unions are among the creditors that don't [offer information to credit bureaus]." While you may feel that your credit record among these smaller companies are worth adding to your report, be aware that smaller companies may not update these files. A solution to this problem is to wait until you close these accounts to add them to your credit report if you feel their worth is necessary for your profile.

Remember that your credit report covers a small percentage of your life (hopefully!), and that time does eventually heal most errors. A large number of inquiries into your account, however, may hinder your progress as each new inquiry may reopen old wounds. According to the FTC, any application for a job that pays more than $75,000 per year, or information reported because you've applied for more than $150,000 worth of credit or life insurance are just two kinds of inquiries that keep negative reports active. While this information suggests that a person might lay low during credit reparation, I would suggest that a simple question - "Are you going to access my credit report?" - and an equally simple explanation - "My credit report is inaccurate, and I'm in the process of rectifying the situation." - will go a long way to assure some success. After all, we're all at risk for credit report errors, and you never know when your honesty might open a new dialogue that will equate to a more successful endeavor.

Until Next Week,
Linda Goin