Default : Check Credit : Credit Errors

Credit Errors and Disputing

It is important that you "know your credit" because this is your lifeline in the world of lending. If information on your credit report is incorrect, you must take immediate action to correct it.

Some of the most common errors that appear on a credit report are listed below:

Someone else's credit information - It is not uncommon for information from other people to appear on your credit report in error. If another person has a name similar to yours, it is a possibility that their information will be shown on your credit report. This is usually easily fixed by the reporting bureau. It is important to resolve this issue as another person's negative credit history can affect your credit.

Outdated or Inaccurate Reporting - Information received from lenders and creditors may be incomplete, or may reflect information that is incorrect. Incomplete account history, or incorrect payment information may be reflected on your credit report. If you disagree with a creditors reporting, you should notify the creditor and the credit bureau of the incorrect information. You may need to provide documentation to back-up your claims, such as cancelled checks and receipts of payment. With the exception of a Chapter 7 bankruptcy, negative account information may not be reported by your creditors after seven years.

Account Fraud - Identity theft is fast becoming a common crime. Accounts can be opened in your name without you even knowing it. Your Social Security Number is a vital piece of information in identity theft, so make sure you only use it with trustworthy institutions. If you believe a fraudulent account has been opened in your name, you should take immediate action to remedy the situation. The first thing you should do is contact the issuing creditor and cancel the fraudulent account. Next, you should contact the major credit bureaus to place a fraud alert on your account. This will stop any activation of pre-approved credit offers, and alert creditors to call you first for approval. Last, contact your local authorities and file a report. This is very important, as most creditors will not review your dispute unless it has been reported to the police.

You should make sure the information in your credit report is correct. Not only is your credit score based on this information, but lenders also review this information in making credit decisions. Review your credit report from each credit reporting agency at least once a year and especially before making a large purchase, like a house or car.

You are entitled to a free credit report from the three major credit reporting agencies annually. A service established by Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months, from www.annualcreditreport.com. The Federal Trade Commission (FTC), the nation's consumer protection agency, has prepared a brochure, Your Access to Free Credit Reports, explaining your rights and how to order a free annual credit report.

Disputing Tips As we mentioned above, the credit bureaus have 30 days to investigate a dispute regarding inaccurate information on your credit report. The bureaus must then give you the written results of their findings, and a copy of your credit report if information has been changed.

Disputes can be filed with either the credit bureau, or with your creditor. If you decide to send your dispute to the creditor, they are obligated to follow the guidelines set forth by the Fair Credit Reporting Act (FCRA). Upon reporting a dispute to your creditor, they may not report the item to the bureaus without including a notice of your dispute. If the dispute is ruled in your favor, the creditor may no longer report the disputed item to the bureaus.

If you are not able to rectify the problem with the creditor, the FCRA allows you to add a statement of dispute to the item on your credit report. A statement of dispute is a factual description of status for the account in question. Both your version, and the creditor's version are included in this statement. You may also ask the bureau to add a statement of dispute to the account after attempts to resolve the dispute are not reached. The statement will be reported on your credit report for future inquiries on your credit, allowing creditors to view the details of what happened with the dispute.

Achieving settlement can sometimes be difficult. When settlement cannot be reached, you can file a dispute with the credit bureau's National Consumer Assistance Center. To enter such a dispute, call the telephone number included with your credit report or complete a "Reinvestigation Request" form, which is also included with the credit report.

Although you can request a reinvestigation, there is no guarantee that you will receive a different result the second time around-once an official decision has been made, you will need to come up with documentary evidence to persuade a credit bureau to delete the item. In some cases, even if you are successful in persuading the credit bureau to delete the information, it may wind up being added to your report again at the creditor's insistence.

If you still get no response after continued attempts to contact the parties involved, you can contact your state's Attorney General Office. If you believe the creditor or a credit bureau has violated the FCRA, you have the right to sue all relevant parties in state or federal court. If you win, the creditor or credit bureau will have to pay damages and reimburse you for attorney fees to the extent ordered by the court.

You may also wish to contact the FTC to file complaints against non-cooperative creditors and credit bureaus. Although the FTC can't act as your lawyer in private disputes, information about your experiences and concerns is vital to the enforcement of the Fair Credit Reporting Act. You may send your questions and/or complaints to:

Consumer Response Center FCRA, Federal Trade Commission, Washington, D.C. 20580 You may also visit the FTC online at www.ftc.gov.