An accurate credit history is crucial to maintaining a good credit score, since wrong or inaccurate information can needlessly bring it down. Therefore, a regular annual review of all three reports is important to making sure your score properly reflects your credit history.
The Most Common Cause of Errors
The most common cause of errors is the report being incomplete, or containing information about someone else. Often this happens because someone made an error in reading or entering name or address information.
It could also be that the person gave an inaccurate Social Security number (or the number was misread by the creditor, information provider, or credit bureau), or payments were inadvertently applied to the wrong account.
No matter how these errors occur, it is very important to be sure that they are corrected as soon as possible.
Three Things You Need to Do
First, you must order credit reports from all three agencies: Experian, Equifax, and TransUnion. This can be done by going to their individual sites or an overall site like Annualcreditreport.com. Once you obtain them, you should review each carefully for accuracy.
Second, if you find a mistake, you should contact both the credit bureau and organization that provided the information to the bureau, in writing, as soon as possible. This is because, under the Federal Fair Credit Reporting Act, both of them are responsible for correcting inaccurate or incomplete information in your report.
In your letter, you want to tell the credit bureau in writing what information you believe to be inaccurate. They must investigate it (usually within 30 days) unless they consider your dispute frivolous. Include copies (NOT originals) of documents that support your position. You should also provide:
- Your complete name and address
- Specifically stated facts, along with an explanation as to why you dispute the information.
- A request for deletion or correction.
- A copy of the report with the pertinent items circled.
A great sample letter is provided here on the MyFICO.com web site. Send your letter by certified mail, return receipt requested, so you can verify that the credit bureau received your correspondence. Keep copies of your dispute letter and enclosures.
As to the creditor (or other information provider) you need to write a letter explaining that you are disputing the information provided to the credit bureau. Include copies of documents that support your position. Be sure to use the address provided on your monthly statement or disputes.
If the provider again reports the same information to a bureau, it must include a notice of your dispute. Request that the provider copy you on correspondence they send to the bureau. Expect this process to take between 30 and 90 days.
Third, follow up! After 90 days, request the reports again to verify the updated information. Persistence pays off in a more accurate credit score, which might result in the obtaining of credit, or credit at a lower interest rate or other more favorable term, in the future.
So What Should I Do?
If you continue to have problems with correcting these errors, or if you would like to retain me to assist you in the process, please contact my office for a consultation to discuss your rights and what has to be done to set the record straight.