Handling Errors in Your Credit Report: Keeping the Record Straight
Errors in your credit report can cost you hundreds or thousands of dollars in additional finance charges and higher interest rates. In some cases, credit report errors can result in being turned down for a loan or a job and may affect your chances of owning or renting a home. For these reasons, it’s essential to correct any inaccurate or outdated information on your credit report as quickly as possible to ensure that you get the credit you deserve.
Exercise your rights
The Federal Fair Credit Reporting Act was amended in 2003 to provide consumers with the right to obtain free annual credit reports from the three major reporting credit bureaus, Equifax, TransUnion, and Experian; by exercising this right, you can ensure that the information being reported to lenders, employers and landlords is accurate and up-to-date. If any errors exist in the report, it’s time to move on to the next step.
Contact the credit bureau
If you find errors in your credit report, you can dispute them in writing with the credit bureau that compiled the report. Items that can be disputed include past and current employers, places of residence, marital status or name of spouse or dependents and, of course, credit history and court judgment information. The dispute letter must include the following elements:
• your complete name and address
• full description of the specific items to be corrected
• copies of any supporting documents
• the desired resolution of your dispute
For example, if you want a notation or explanation inserted into your credit report regarding the inaccurate information, then list that as your desired resolution. In most cases, however, it’s preferable to have the inaccurate information removed entirely. The dispute letter and accompanying documents should be sent Return Receipt Requested in order to provide verification that the credit bureau received the materials.
Wait it out
At this point, the credit reporting company is obligated to either dismiss your dispute as frivolous or to investigate it further. The investigation is limited to thirty days in most cases. If you have provided documentation to support your dispute, the credit bureau typically is required to ask the organization that initially reported the information to provide documentation for the credit report entry within this thirty-day window. If no response is received in this timeframe, then the disputed information will be removed from your credit report. However, if the disputed entry is later found to be valid and is supported by documentation from the initial creditor or reporting agency, the removed information may be restored at a later date.
Errors of omission
Not all credit report errors involve inaccurate information. In some cases, positive information about your credit history may not appear on your credit report. This can artificially lower your overall credit score and create obstacles to obtaining new credit. If some of your creditors do not appear on your credit report, you can contact the credit bureaus directly and request that they add this information. If the credit reporting agencies can verify the account information you provide, then the accounts in question will usually be added to your credit report. Be warned, however; some companies will charge a fee for this verification service.