Credit Reports

Isn't the credit report one of the most confusing things on the planet? Not only is there more than one credit bureau taking in your credit information, there are three places to track all of the data that is circulating about you.

There is no doubt that the entire process of keeping track of your credit reports and making sure the right information is on them can be exhausting. But what can be even more exhausting is acquiring the wrong information about credit reporting, which could have a horrible effect on both the report and your credit score.

To avoid the turmoil that inaccurate information about the credit report can bring, it's good to address credit report myths. Here are the top 10 to know:

1.Checking My Report is Unnecessary if I Pay My Bills

Many people think that just because they pay their bills on time, they don't need to check their credit report. In understanding credit report information, you learn that there could be information on your report that has nothing to do with you. So just because you pay bills on time doesn't mean that there isn't an inaccurate account ruining your credit score, or worse, that someone else hasn't stolen your identity and opened numerous accounts in your name.

Checking your credit reports is something everyone should do often to make sure the information is accurate at all times.

2.If I Check My Credit Report, it Will Hurt My Credit Score

Now's the time to learn the difference between a hard pull and soft pull, as well as the impact of checking your own report. A hard pull means that a lender or creditor is looking at your report to determine your credit worthiness. This type of pull could lower your credit score by a few points and is viewable for other lenders to see how often you're applying for loans and credit extensions.

A soft pull, on the other hand, is usually done by credit card issuers and lenders who want to pre-approve customers and view credit report information for a basic idea of your credit history. The soft pull is not visible to anyone but you and doesn't have a negative effect on your credit score.

Finally, the lowest level of the credit check is you checking your own. No one sees when you check your credit and it doesn't affect your score. So if you've been afraid to check your report, now's the time to get started.

3.Paying a Debt Off Will Get it Removed From My Report

Some borrowers are often very frustrated to learn that after they've paid off a debt, it isn't magically removed from the credit report. Unfortunately, the information doesn't have to be removed for seven years on most collection accounts, and as much as ten years for bankruptcies.

This means, even if you pay off your debt, you will most likely have to look at the account until it drops off. The only way around it is to negotiate with the creditor to have it removed - but it's totally up to them to do so.

4.The Original Creditor and Collection Agency Can't Both Be Listed on My Report

If you owe money to a company that has asked a collection agency to collect the debt for them, both accounts are allowed on your credit report. Yes, this means that you could legitimately have two listings on your report for the same account. It's not fair, but credit bureaus don't frown upon this, so until something changes, your report could be littered with more delinquencies than you actually have.

5.Canceling My Credit Cards Can Help My Report and Score

Depending on how long ago you received your credit card, it may be the one thing holding your credit history together. Part of how your credit score is calculated depends on the length of your credit history. So if you're trying to delete items from your report to shorten the length of your credit report, you could very well be deleting that 14-year-old account that is giving your score a boost.

6.Credit Repair Can Instantly Fix My Report

While it is true that taking steps to work with a credit repair agency could help improve your report and score, especially if some information on your report was incorrect, a repair agency really can't force a credit bureau to remove items that, by law, have every right to be there.

Some companies submit dispute letters in hopes of the creditor not being able to verify the account, which ultimately requires that the item be removed. But it doesn't always work, so beware of companies that promise to instantly remove items 100 percent of the time.

7.My Bad Debts Automatically Fall Off in 7 Years

Another misconception of the credit report is that after the allotted period of time to stay on the report, it will automatically be removed. Not true. Often times, credit bureaus will remove the information when the time comes, but other times, the same old information sits there for weeks or months, all the while causing problems for your credit score.

If you know that an item should have already been removed, it is up to you to dispute it to ensure that it doesn't have a negative effect on your score.

8.My Library Fines and Parking Tickets Don't Count

Yeah, right! Don't you know that just about anything could show upon your report nowadays? If you have unpaid library fines and parking tickets, they could easily wind up on your credit reports if they're turned over to collection agencies. Even some utility companies are now reporting regularly to credit bureaus.

9.Credit Reports Are All the Same

Unfortunately, credit bureaus by no means include the same information on their credit reports. This makes keeping track of your credit rating and report information that much more complicated. However, this is no excuse for not knowing what's going on with your reports. It is your responsibility to check your credit report with each bureau (Equifax, Transunion and Experian) to see what information is listed and to make sure that it's accurate.

10.Debit Cards Can Improve Your Credit

Wrong! Your debit card and pre-paid credit cards are considered nothing more than electronic checks. Since they don't count as extensions of credit, they don't help your credit report or score in any way.

Now that you've dispelled some of the credit report myths, it's the time to check your own reports to improve your credit the right way.

Aside from Christmas, Valentine's Day may just be the biggest gift-giving holiday of the year. Women in particular look forward to receiving big bouquets of flowers at their office, boxes of candy and maybe even a diamond bracelet (or two).

But is buying an expensive Valentines gift financially responsible? Despite mounting pressure from your significant other to buy a great gift as the holiday looms, it may be better that you get her a few unique gifts that teach her financial responsibility (even if it results in the silent treatment for a few days).

Get Her a Savings Account

What better gift to give your sweetie on Valentine's Day than a high-yield savings account? Her money would be FDIC insured up to $250,000, she have access to her liquid funds and she would be able to watch her money grow.

And if you're not sure how she would feel about a savings account, you could opt for purchasing her some CDs, open a money market account for her, or even go with a reward checking account.

If you're worried that she may be angry that you're not getting her a tangible gift, you could always deposit some money in her account to get her savings started for her.

Send Her a Credit Report and Score

Another cool idea would be to get your loved one access to her credit report from all three credit bureaus (TransUnion, Equifax and Experian) and her score.

Nowadays it's extremely important to know just what's showing up on your credit report. Incorrect information could be listed on the report that could have a negative effect on your score. Also, if you've had problems with debt in the past, you can see just how many records are showing up on the report.

Go Free Credit is currently offering a free 3-in-1 credit report and score by signing up for their trial membership. In the trial period, you get to take advantage of the following:

• 7 free days of credit monitoring from all three credit bureaus
• A detailed analysis of your credit history
• Details on who has viewed your credit report
• Unlimited online access to your credit report for 60 days

After the trial period, you will be billed $14.95 per month. Don't you think this is worth it to make sure your sweetie is able to access her report and update her score anytime she wants? What a gift!

Sign Her Up for Identity Protection

Did you know that identity theft affected almost 10 million people in 2008? There are now so many types of identity theft (credit card, utilities, bank, employment, loan, government and social networking) that it's hard to keep up with how someone could take advantage of your personal information. (See our infographic on phishing)

You don't want your lovely lady to suffer through the trauma caused by identity theft, do you? If not, then a great Valentines gift would be to get her some form of identity protection.

For instance, you could sign her up for an account with Go Identity Protect. You would be able to take advantage of a 30-day free trial period that offers:

• ID alerts: This detects important changes to your credit report that might indicate fraud
• Free credit report: You would help her gain access to her free Experian credit report
• $1 million in protection: She would receive a $1 million product guarantee to cover losses associated with stolen or misused credit or debit or credit cards

After the trial period ends, you would pay $9.95 a month to keep her membership going. You must admit, it's a lot cheaper than a diamond bracelet!

OK, you may think we're joking here, but flowers and candy are great gifts for your sweetheart only in theory. What can she do with them after they've died and gotten old? However, investing in ways to save, manage credit and protect her identity are gifts that can stick with her for years to come. So why not take the unconventional route this year by investing in your love's bottom line?

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