The information included in your credit report contributes to your credit score. Factors such as how much you owe to each credit company and whether you have accounts in negative standing, lead to a positive or negative credit rating. Creditors are obligated by law to report factual information on your report. If you find errors, the credit bureaus are required to remove the information.
The Fair Credit Reporting Act (FCRA)
The federal Fair Credit Reporting Act (FCRA) protects consumers against credit report inaccuracies, discrimination and violations of privacy. In the early days of credit reporting, creditors reported cryptic information to the bureaus that consumers either could not understand or were not allowed to see. In 1970, the Fair Credit Reporting Act was created to prevent unfair practices among credit bureaus and creditors. Under the law, you have a right to know what's in your credit report and dispute information that is inaccurate.
Included Information
Credit reports contain a listing of your recent credit accounts. After seven years, most derogatory credit accounts roll off your report. There are some reportings, however, that leave a long term stain on your credit. For example, bankruptcy remains on your credit report for 10 years and cannot be removed before this time frame. With each credit account reported are details of your payment history including whether you pay late, the amount you owe and whether the creditor considers your account to be in good standing. The extent to which you are late is also included in your credit report. When an account is closed, it remains on your report with information on why your account was closed. You can dispute any information on your credit report that does not reflect facts surrounding that account.
Disputing
With advancements in technology, credit bureaus allow you to dispute items in your credit file online. However, you can also write a letter and enclose a copy of your credit report and documentation to support your dispute. Disputing online gives you a faster turnaround on the response from your creditor. Each creditor has 30 days to prove the information reported on your report. If the creditor does not respond or cannot provide proof with 30 days, the credit bureau is required to remove the item. There is no limit to the number of items you can dispute on your report.
Free Reports
You can request a free copy of your file if a lawsuit is brought against you based on information in your file, you are on public assistance, unemployed or a victim of fraud. As of 2005, all consumers are entitled to one free credit report from the major credit bureaus each 12 months. Review updates to your credit file consistently to monitor activity. Credit scores are not included in a free credit report. For an additional fee, you can obtain your score from the bureaus.
What to Dispute
Negative items remain on your credit report for seven years. Check your credit report to ensure that any old charged off accounts, late fees, or judgments roll off your report in the correct amount of time. Only late payments that extend beyond 30 days can remain on your credit report for seven years. Also, each delinquent account reported in your credit score should reflect an accurate amount. Reference your old billing statements to ensure accuracy. If you are a victim of identity theft, you can dispute any unauthorized accounts opened in your name.
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