It is important that you know your credit because this is your lifeline in the world
of lending. If information on your credit report is incorrect, you must take immediate
action to correct it. Some of the most common errors that appear on a credit report
are listed below:
- Someone else's credit information - It is not uncommon for information
from other people to appear on your credit report in error. If another person has
a name similar to yours, it is a possibility that their information will be shown
on your credit report. This is usually easily fixed by the reporting bureau. It
is important to resolve this issue as another person's negative credit history can
affect your credit.
- Outdated or Inaccurate Reporting - Information received from lenders
and creditors may be incomplete, or may reflect information that is incorrect. Incomplete
account history, or incorrect payment information may be reflected on your credit
report. If you disagree with a creditors reporting, you should notify the creditor
and the credit bureau of the incorrect information. You may need to provide documentation
to back-up your claims, such as cancelled checks and receipts of payment. With the
exception of a Chapter 7 bankruptcy, negative account information may not be reported
by your creditors after seven years.
- Account Fraud - Identity theft is fast becoming a common crime.
Accounts can be opened in your name without you even knowing it. Your Social Security
Number is a vital piece of information in identity theft, so make sure you only
use it with trustworthy institutions. If you believe a fraudulent account has been
opened in your name, you should take immediate action to remedy the situation. The
first thing you should do is contact the issuing creditor and cancel the fraudulent
account. Next, you should contact the major credit bureaus to place a fraud alert
on your account. This will stop any activation of pre-approved credit offers, and
alert creditors to call you first for approval. Last, contact your local authorities
and file a report. This is very important, as most creditors will not review your
dispute unless it has been reported to the police.
- You should make sure the information in your credit report is correct.
Not only is your credit score based on this information, but lenders also review
this information in making credit decisions. Review your credit report from each
credit reporting agency at least once a year and especially before making a large
purchase, like a house or car.
- You are entitled to a free credit report from the three major credit
reporting agencies annually. A service established by Fair Credit Reporting Act
(FCRA) requires each of the nationwide consumer reporting companies to provide you
with a free copy of your credit report, at your request, once every 12 months, from
www.annualcreditreport.com.
The Federal Trade Commission (FTC), the nation's consumer protection agency, has
prepared a brochure,
Your Access to Free Credit Reports, explaining your rights and how to order
a free annual credit report.
You can request a copy of your credit by contacting the credit reporting agencies
directly:
As mentioned above, you should review your credit report and report any errors immediately.
The credit reporting agency must investigate and respond to you within 30 days.
If you are in the process of applying for a loan, immediately notify your lender
of any incorrect information in your report. Your lender will need to reorder your
credit report and score once any changes have been made to your information at the
credit reporting agency. Small errors may have little or no effect on your score.
If there are significant errors, however, the lender may disregard the score.
Disputing Tips
As we mentioned above, the credit bureaus have 30 days to investigate a dispute
regarding inaccurate information on your credit report. The bureaus must then give
you the written results of their findings, and a copy of your credit report if information
has been changed.
Disputing an inaccuracy on your credit report must be filed in writing. Only send
your dispute to the credit bureau that reported the inaccuracy on your credit report.
The bureau's web site should have information on what address to send your dispute.
You should include the following information on your report:
- Your full name, including your middle name, and suffix (Jr., Sr., etc.)
- Your current mailing address
- Your Date of Birth
- Your Social Security Number
- The reason you are filing your dispute, including the account in question and any
applicable account numbers
- A copy of the credit report with the disputed item highlighted
Disputes can be filed with either the credit bureau, or with your creditor. If you
decide to send your dispute to the creditor, they are obligated to follow the guidelines
set forth by the Fair Credit Reporting Act (FCRA). Upon reporting a dispute to your
creditor, they may not report the item to the bureaus without including a notice
of your dispute. If the dispute is ruled in your favor, the creditor may no longer
report the disputed item to the bureaus.
If you are not able to rectify the problem with the creditor, the FCRA allows you
to add a statement of dispute to the item on your credit report. A statement of
dispute is a factual description of status for the account in question. Both your
version, and the creditor's version are included in this statement. You may also
ask the bureau to add a statement of dispute to the account after attempts to resolve
the dispute are not reached. The statement will be reported on your credit report
for future inquiries on your credit, allowing creditors to view the details of what
happened with the dispute.
Achieving settlement can sometimes be difficult. When settlement cannot be reached,
you can file a dispute with the credit bureau's National Consumer Assistance Center.
To enter such a dispute, call the telephone number included with your credit report
or complete a "Reinvestigation Request" form, which is also included with
the credit report.
Although you can request a reinvestigation, there is no guarantee that you will
receive a different result the second time around-once an official decision has
been made, you will need to come up with documentary evidence to persuade a credit
bureau to delete the item. In some cases, even if you are successful in persuading
the credit bureau to delete the information, it may wind up being added to your
report again at the creditor's insistence.
If you still get no response after continued attempts to contact the parties involved,
you can contact your state's Attorney General Office. If you believe the creditor
or a credit bureau has violated the FCRA, you have the right to sue all relevant
parties in state or federal court. If you win, the creditor or credit bureau will
have to pay damages and reimburse you for attorney fees to the extent ordered by
the court.
You may also wish to contact the FTC to file complaints against non-cooperative
creditors and credit bureaus. Although the FTC can't act as your lawyer in private
disputes, information about your experiences and concerns is vital to the enforcement
of the Fair Credit Reporting Act. You may send your questions and/or complaints
to:
Consumer Response Center
FCRA, Federal Trade Commission, Washington, D.C. 20580
You may also visit the FTC online at www.ftc.gov.
Know Your Credit