|
Errors and Disputing
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Outdated or Inaccurate Reporting - Information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.
Alternatively, 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.
|
|