FEDERAL TRADE COMMISSION
FOR THE CONSUMER
BUILDING A BETTER C
If you’ve ever applied for a credit card, a personal loan, or insurance, there’s a file about
you. This file is known as your credit report. It is chock full of information on where you
live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy.
Consumer reporting companies sell the information in your report to creditors, insurers, em-
ployers, and other businesses with a legitimate need for it. They use the information to evaluate
your applications for credit, insurance, employment, or a lease.
Having a good credit report means it will be easier for you to get loans and lower interest rates.
Lower interest rates usually translate into smaller monthly payments.
Nevertheless, newspapers, radio, TV, and the Internet are filled with ads for companies and
services that promise to erase accurate negative information in your credit report in exchange
for a fee. The scam artists who run these ads not only don’t deliver — they can’t deliver. Only
time, a deliberate effort, and a plan to repay your bills will improve your credit as it’s detailed
in your credit report.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, has written
this booklet to help explain how to build a better credit report. It has six sections:
explains your rights under the Fair Credit Reporting Act and
the Fair and Accurate Credit Transactions Act.
tells how you can legally improve your credit report.
offers tips on dealing with debt.
cautions about credit-related scams and how to avoid them.
offers information about identity theft.
lists resources for additional information.
The Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of infor-