How to Deal With a Derogatory Credit Report

False information on a credit report can hurt you. A lender who reads that you're still in default on an account you paid has no way to know differently. Neither do employers or insurers who check credit data before deciding to do business with you. Fortunately, federal law protects you against derogatory credit reports. Credit-reporting companies and anyone providing them with information have a legal obligation to correct errors. It's up to you to catch the errors and notify them.

Instructions

1

Order a free credit report from each of the three major credit card bureaus -- Equifax, Experian and TransUnion -- and review it for errors. Each bureau must provide you with a free report once every 12 months. You can order all three at once or space them out over the year.

2

Contact the credit bureaus in writing about any errors you find. If you have documentation -- a written statement from your creditor that you closed the account or settled the debt -- make a copy and send that with your letter. Send the letter by certified mail, return receipt requested, so that you have proof the bureau received your correction.

3

Wait for the bureau to investigate and respond, which usually happens within 30 days. If the bureau agrees the report was incorrect, it sends you a copy of the amended report and identifies the source of the information. Contact the information provider, in writing, and ask him to correct his files too.

4

Ask the bureau to notify anyone who received a credit report containing the derogatory data. When you ask, the bureau has to send corrections to everyone who received an inaccurate report in the last six months. If employers received an inaccurate report at any time in the last two years, the bureau has to notify them too.