Incorrect information on your credit report can damage your credit rating and reduce your ability to obtain loans and other credit. Unfortunately, many people aren't aware of the information on their credit report until after they have been rejected for credit.
Types
Incorrect information on a credit report can range from harmless errors such as outdated occupation titles, addresses and phone numbers to more serious errors such as incorrect reporting by a creditor, duplicate information and unknown credit accounts and inquiries, which may be signs of identity theft.
Fair Credit Reporting Act
The Fair Credit Reporting Act, a federal law created to protect consumers from unfair credit practices, gives you the right to dispute any incorrect or incomplete information in your credit file. Each of the three major credit bureaus provides a form or online application for filing these disputes.
Dispute Procedure
After your dispute is filed, the credit bureaus have 30 days to investigate, and a dispute notation will appear on your credit report. If the creditor is unable to prove the accuracy of its information, the bureau must stop reporting it. When the investigation is complete, the bureau will send you a report detailing its investigation and an updated copy of your credit report if changes were made.
Misconceptions
Negative information on your credit report may appear incorrect at first glance, but may be accurate. Over time, older unpaid accounts may be transferred through several collection agencies. As a result, the credit grantor listed on the credit report may look unfamiliar. Contact the creditor listed to verify the name of the original creditor before filing a dispute.
Monitor Your Credit
Review your credit report at least twice annually to monitor instances of inaccuracies. Consumers are entitled to one free copy of their credit report each year, or reports can be purchased from the reporting agencies as often as necessary. There are also a variety of companies that monitor credit changes for you in exchange for a monthly fee.
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