The prospective lender would love to gather as much information about you as possible; while some of this information comes from his queries addressed to you, or queries with lenders you may have dealt with earlier, the bulk of his information is usually sourced directly from your credit report.
The core problem confronting the consumer
The agencies that handle the reporting themselves hire many investigators or sublet services to other agencies to research and provide the data. Like in any other form of research involving many variables there is a lot of scope for error. Agencies may misinterpret data, they may wrongly report facts, or they may repeat data which itself is wrongly tabulated by creditors. Worse, they may confuse you for somebody else with the same name or surname.
Credit reporting errors are skewing proper credit assessments
It is estimated that among the billions of credit reports generated on 200 million Americans, some 40% have serious errors. Consumers that ignore their reports and who don’t scrutinize their reports on a regular basis may be saddled with errors that may be punishing them by charging higher rates of interest and bigger insurance premiums and many other additional charges that make their loans costlier. To breathe life into this crucial sector and to ensure consumers do not get short shrift from agencies, the Consumer Financial Protection Bureau (CFPB) has initiated steps to closely watch many credit reporting agencies including the big boys: Experian, Transunion and Equifax.
What the CFPB wants to do:
- It aims to ensure the accuracy of the information procured from mortgage financiers and debt collectors.
- It aims to ensure that the credit reports are generated in an error free manner.
- Put in place a mechanism for disputing and resolving errors.
What you can do to protect your credit rating
Much as the CFBP may be genuinely concerned and keyed up to perform its role as a big brother watching over the credit reporting agencies, the task of keeping billions of reports error free is not going to be easy, and it’s high time the consumer initiates action by himself without wasting a minute.
- The very first job is for the consumer to source a copy of the credit reports from all the three big players in the credit reporting business. The annualcreditreport.com is the best place to begin.
- Scrutinize each report closely, and try and spot the errors as they appear, document these errors and get in touch with the lenders as soon as you can. If there is a valid reason like sickness or disability, divorce proceeding or any other circumstances beyond your control that accounts for the delay in payment, you can ensure the circumstances are taken into consideration.
- Delay in following up mistakes and rectifying them could prove very costly, so don’t give up at any cost. Your hard work and painstaking efforts may pay off in a brighter report that will fetch you loans at more favorable terms.
How a vehicle title loan can assist you in consolidating small loan balances, thereby improving credit ratings
That the CFPB is working on an error free credit reporting system is a welcome change that should benefit all consumers, but the responsibility for ensuring the accuracy of one’s report rests largely with the consumer till the agencies improve their reporting. If you feel weighed down by unsecured lending that is too costly to service, try a cash loan for title to consolidate these card balances.
The loan for vehicle title can be availed quite easily on the collateral of your car pink slip papers. The car equity loan can assist you in getting your hands on some serious cash aggregating 60% of your vehicle’s resale value that will be assessed by the title lender. The auto equity loan charges 25% APR interest which is much lower than pawn loans or payday loans. The auto collateral loan repayment will be low enough not to strain your monthly income. These title loans can be applied even if you are constrained by a poor credit history, or a modest part time income.