My Coast Guard
Commentary | Sept. 16, 2021

Money Matter$ Reviewing and fixing your credit report

By Graziella Panetta, Personal Financial Manager for District 14

What is credit? What is a credit report? What is a good credit score? Knowing these answers may improve your military career, your security clearance, and/or a career transition. Credit is defined as the ability to borrow money with the understanding that you will pay later. A credit report is a document that lists all your revolving accounts (debts) based on your personal information. There are three major credit-reporting agencies that track different information about consumers. Your credit score will depend on which credit-reporting agency you receive your report from. When was the last time you checked your credit report? Checking your credit report at least once a year and/or before making a major purchase or taking on a loan will help you gain a better understanding of your current credit and debt situation. Bad credit and a low credit score will impact your ability to qualify for credit, it will also impact your ability to obtain and maintain a security clearance and your career.   

By reviewing your credit report regularly, you can detect negative accounts right away making it easier to fix issues or errors. The longer a negative account stays on your credit report the harder it will be to negotiate the repayment plan with the creditor because of the additional charges and late fees. In addition, reviewing your credit report regularly can help you catch signs of identity theft early and avoid unnecessary financial and emotional distress.  

The Federal Credit Reporting Act (FCRA) is the federal law that regulates how credit report agencies collect and share consumers’ information. It defines the type of information the bureaus are allowed to collect and limits who is allowed to view a credit report and under what circumstances. It spells out important consumer’s rights and protections, including the right for consumers to check their credit report for free. 

Steps you can take to Review and Fix your Credit Report 

  • Check your Credit Report - It is important to know what is in your credit file. Check your credit report by visiting the official government website annualcreditreport.com.  Normally, each one of the three major credit bureau, Experian, TransUnion, and Equifax provide one free credit report at year. However, because of the rise in scams and identity theft during the coronavirus pandemic, the three national credit reporting agencies are extending the benefit to access credit reports weekly for free until April 2022.
  • Review for Accuracy - Review all the information to make sure everything is accurate.  Even though there are federal laws regulating consumer reporting agencies and protecting consumers, fraudulent reporting and mistakes may still occur. It is your responsibility to make sure the information contained in your credit report is accurate and up to date.  
  • Dispute any Information that is not Accurate - Dispute any inaccurate or outdated information online or in writing by submitting a dispute form along with copies of supporting documents. Identify each item that is disputed, explain why the information is disputed and request an investigation. The FCRA requires the bureaus to conduct the investigation within a reasonable time, usually between 30 to 45 days. Once the investigation is completed, any inaccurate and outdated information must be corrected or removed from the credit report. 
  • Add a Statement to your Credit Report telling your side of a Dispute - If after conducting the investigation the bureau concludes that the negative information is correct, you have the right to place a short statement telling your side of the story. 
  • File a Complaint with the Consumer Financial Protection Bureau (CFPB) - If the credit bureau fails to respond to your request in a satisfactory manner, you can file a complaint with the (CFPB). The CFBP will contact the bureau and will work to get you a response within 15 days. 
  • Avoid Credit Repair Organizations - Credit repair organizations use the internet and social media to target consumers. They make false claims, such as “we can help you solve your credit problems in no time”, “we can remove all your negative accounts from your credit report”. Some people may even get calls from telemarketers offering credit services and promising to make all the bad debt disappear from their credit file. Don’t believe these statements, usually those companies charge high fees and will not solve your problems. Only time and working with your creditors to establish repayment plans will improve your credit report. You can do it yourself; you can contact your Personal Financial Manger for assistance to set up payment plans and develop a budget that allows you to make the payments and meet all your financial obligations.
  • Take Advantage of Free Credit Monitoring - Military members can take advantage of free credit-monitoring services provided by the three national credit bureaus. Visit each bureau's website for eligibility and information about the registration process, Equifax, Experian, and TransUnion.  

Rebuild your Credit
It may take time, but with the right effort and commitment you will be able to rebuild your credit. The FCRA limits the amount of time negative information should stay on the credit report. Bankruptcies must be removed after 10 years; any other negative information such as late payments, tax liens, and accounts placed for collections must be removed after seven years.  Once an account is removed from your credit report it will not be visible to creditors.  However, any unpaid balance will show on the security clearance investigation. It is never a good idea to wait for negative accounts to fall off your credit report, it will negatively impact your ability to obtain and maintain your clearance and may cost you your military career or a prospective new job. You need to be responsible and take care of your financial obligations. So don’t wait any longer, get started today!

Resources 

  • For additional help reach out to your nearest Personal Financial Manager (PFM) located at the Health, Safety, and Work-Life Regional Practice (HSWL-RP). Also the following handouts have more information about credit and your rights as a consumer; Military Consumer Protection, Sources of Help for Military Consumers, and Understanding Credit.
  • Your Command Financial Specialist (CFS) is available for support with basic financial training, budgeting, and referrals.
  • CGSUPRT provides unlimited 30 minute money coaching sessions, online resources and financial classes. For more information visit www.CGSUPRT.com or call 1-855-CGSUPRT.

About the Writer
Graziella Panetta is the Personal Financial Manager for District 14. She is an Accredited Financial Counselor© (AFC©) and holds a Master’s in Business Administration. Her interest in personal finances started when she moved to Hawaii with her military spouse and started volunteering at the Navy Marine Corps Relief Society. She was awarded the FINRA Foundation Military Spouse Fellowship in 2008 and earned her AFC in 2009. Since then, she has been providing financial education and counseling to military members and their families. She enjoys helping her clients with establishing and achieving their financial goals!