Thursday, January 6, 2005

What If There Is a Mistake on a Credit Report?

Many parts of your personal financial situation depend on your credit report. The rates you pay for loans and the premiums you pay for auto or homeowner's insurance depend on your credit. When you find errors on your credit report, you must follow a process to remove them so you can be certain your report is accurate.

Check Your Reports

    You should check your reports regularly to see if they contain errors, such as late payments or collections accounts. You can receive an annual copy from each of the major credit reporting agencies from the Annual Credit Report website. The process is simple, and the delivery of the report is immediate over the Internet. If you have been denied credit, you are entitled to a free copy of your report from the agency the creditor consulted before denying you. You can also purchase a copy of your report from each agency if necessary.

Dispute With Credit Bureau

    If you find errors on your report, you must dispute them. The credit reporting agencies have a process on their websites for disputes, usually through the reports you receive online. You can check the disputed item and say why it is an error. The credit reporting agency must research your claim and ask the original creditor to prove the information is accurate. If the creditor does not verify the information, it is removed from your credit file. This process should be completed within 30 days, but it may take as long as 45 days. If the online process doesn't work, write a letter to the agency explaining why the entry is inaccurate and asking it be removed.

Dispute With Creditor

    If the creditor states the information is accurate but you still do not agree, you will need to deal with the creditor directly. Write a letter stating your name and other identifying information. Include the nature of your dispute in the letter, along with the reasons you feel the entry is not correct. If you have documents supporting your claim, send copies. You may need to be persistent in this process. If the creditor still refuses to remove inaccurate information, you may consider filing a lawsuit for damages or contacting your state attorney general's office.

Other Considerations

    You can add a statement to your credit report if you cannot resolve your dispute with a creditor. Such a statement may help with a lender or potential employer who checks and reads the entire report, but it will probably have no affect on your credit score. You probably will not be successful in removing accurate information from your report. As time passes, the negative information will decrease in its effect on your overall credit picture.

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