Disputing Errors on Your Credit Report

Every adult has one: a credit report. It is a historical record of your financial transactions that banks, credit card issuers, and other lenders use to decide if you are eligible for a loan or refinancing, how much your loan amount or limit should be, and what interest rate you will get. Whats more, landlords and even potential employers can use this information to allow you to rent an apartment or hire you for a position. Because of the far-reaching impact of your credit report, it is important to review it yearly and take the necessary actions to take control of your finances so that your credit report is to your advantage.

However, nothing is perfect, and your credit report is no exception. It is common for credit reports to contain errors, and some of these errors can be serious enough to receive credit at rates that are unattractive, or be denied credit altogether. For example, according to a 2004 U.S. Public Interest Research Groups (USPIRGs) study, it was determined that 79% of all credit reports of consumers included errors. This means that for the average consumer, you have 1 in 4 chance that something will be wrong on your credit report.

Breaking that statistic down further, 54% contained personal information that was misspelled, no longer current, belonged to a different person, or was simply inaccurate. Finally, 30% of credit reports listed accounts as being open when the consumer had actually closed them.

While a single misspelled name or one incorrect address in and of itself may not cause you to be denied a loan, cumulatively, these errors can affect your ability to get a credit card, loan, or mortgage. Therefore, you need to review your credit report for mistakes, report them, and have them corrected as soon as you discover them.

Here is the process you need to follow for reporting errors on your credit report:

Obtain a copy of your credit report and review it for any issues. Keep this copy for your records.

Make a copy of your credit report. Highlight the items that are incorrect.
Write two letters:

One to the credit reporting agency that gave you the credit report. You need to ask to have the issues either corrected or removed. Provide all relevant documentation when possible and send via certified mail. Also, make sure you attach proof of your social security number and your mailing address to prevent the potential for delays in their reply.

One to the creditor that reported the issue. This is especially important if you believe you have been a victim of identity theft or fraud. In the letter, indicate the item you are challenging, and specify why the information is either wrong or inaccurate. Again, provide all relevant documentation when possible.

You are supposed to receive an answer from the credit reporting agency between 30 to 45 days. Assuming issues have been corrected, you should receive a free, updated copy of your credit report that you can use to verify the corrections.

However, if the credit reporting agency does not respond to your letter, then you need to do the following:

Send a formal complaint letter to the credit reporting agency indicating that, according to the Fair and Accurate Credit Reporting Act (FACTA), they are required to reply within 30 days from the day your initial letter was received, and if needed, you will seek legal counsel.

Attach your original dispute letter and proof of delivery to your complaint. However, even if a credit reporting agency shows an item as being “investigated”, this does not necessarily mean that the issue has been deleted from or updated in your credit report. If you are convinced that your report is true and accurate, and that you have provided ample and sufficient documentation verifying your details, then also under FACTA, you can ask for the item to be re-examined. Do this within 5 days of receiving their response.

However, if a credit reporting agency either cannot or will not correct or remove an issue, you have the right to present your side of the story on your credit report. Your notation should be less than 100 words indicating why you are challenging each selected item, and will remain on your credit report until it is resolved, if possible.

 Laura Ginn understands how our credit rating can impact on different areas of our lives. Visit http://www.uswitch.com/credit-cards/how-to-strengthen-your-credit-rating/ to learn how to keep my credit rating healthy.

 

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