Money is at its next stage in evolution. From gold to paper to plastic to now, credit has taken myriad forms, and its shape-shifting has kept the common man on his toes since time immemorial. However, Arnita Johnson-Hall, a certified credit consultant, is here to change all that with her expertise in credit education and correction. In this interview, she breaks down the FAQs around credit reporting. Here’s what she has to say.
Q1. Can you help demystify credit reporting for our readers?
- To understand credit reporting, you must accept one thing before anything else, the fact that credit reporting can be understood. Credit reporting isn’t rocket science, and in the simplest terms, it is a statement that contains information about your credit activity and the current status of your credit situation, where your current credit situation includes such things as your loan paying history and the status of your credit accounts. These reports must be up-to-date because lenders use them to decide if you are financially worthy of taking and returning a loan and even determine what interest rates they can offer you. It’s how lenders quickly and articulately assess the health of your financial situation.
Q2. Can you take us through the process of what to look when spotting inaccuracies on one’s credit report?
- Errors, of one kind or another, indicate that something somewhere doesn’t add up, which can then lead to unnecessary delays and unpleasant encounters. In the case of credit reporting, errors are all too common. In fact, according to the US Federal Trade Commission (FTC), 1 out of 5 American consumers experience errors on their credit reports, which makes them seem less creditworthy than they actually are. To keep errors at a minimum, here are few hygiene checks you can perform on your end:
- Ensure that all your personal information (name, middle initial, contact information) is accurate and without spelling errors.
- Update any and all changes that occur on the personal front when they may take place, like new house address or phone number.
- Monitor your credit reports and audit them regularly. If you sense a clerical error, dispute it with the credit bureaus right away.
- Ensure that the dates of closing or opening of an account are accurate.
- Ensure that your account balances and new credit limits are updated timely and accurate.
Keeping a strict vigil over your credit report is vital if you wish to avail its benefits and avoid the consequences of negligence.
Q3. What can you tell us about Luxurious Credit, your highly successful blog that aims at creating credit and financial literacy among women?
- I created Luxurious Credit in 2013 to help women live the luxurious life they deserve by becoming money savvy, credit conscious, and by investing in themselves. My intention with the blog is to provide an engaging financial resource tool for women to use and learn how to get the better of their finances and not the other way around.
I have known many young women who are unable to be discerning when it comes to managing their finances and it is mostly due to them not knowing much about it or how it works. This often puts them in uncontrollable debt, not knowing to manage their money, or even be able to create realistic strategies on how to get out of it. Once debt has you, it is challenging to break free from its iron grasp. The solution, therefore, is to able to not take on too debt you can bare and ensure that if you must obtain debt, your credit is in good shape so that you can save money by obtaining the best interest rates. It’s also important to understand that credit is nothing to be afraid of and can be leveraged if used properly. There were plenty of times when I was trying to build my business and didn’t have capital, but I had good credit, so I could lean on my credit until my financial situation improved. The purpose of having good credit is have it and not need it than to need it and not have it.
Q4. What are some of the steps people can take to communicate with the credit bureaus properly?
- Gather all the information before you contact the credit bureau. Have the complete supporting documentation ready, along with a copy of your credit report, and the inaccuracy(s) you found.
- The credit bureaus are a humongous enterprise catering to all kinds of credit-related issues. Make sure you call the right contact/department if you don’t wish to waste your time.
- While calling credit bureaus remains the most preferred way among people, it is highly recommended that you submit your disputes in writing via mail. This will not only provide you with an official record of your request but help you go beyond asking basic administrative questions.
Arnita Johnson’s insights are notable because she has helped hundreds of thousands of consumers become credit confident and knowledgeable when it comes to all things credit. Here’s wishing her a ton of luck and on helping others during their credit journey.