|
How To Report An Error On Your Credit Report
By: John Simpson
Have you been turned down for a loan recently? Have you applied for store credit
and been refused? Did you really want that car and find out that because of your
'credit score' that they would have to require an unreasonable down payment?
Credit reports are designed to help businesses evaluate the risk factor in
giving you money or valuable products on a line of credit.
The Fair Credit Reporting Act promotes the accuracy, fairness and privacy of
information in the files of the nation's credit reporting agencies. The act is
enforced with regard to the consumer's rights and requiring new responsibilities
for the credit reporting agencies.
For example, a reporting agency must give you a copy of your report and they
must provide a list of every inquiry about your credit report within the last
year.
The agencies collect data on personal identification (name, address, social
security number, current employer, etc), payment histories with all current and
closed lines of credit that details how much you owe, when you've paid on time
and what, if any have been reported to a collection agency.
The final two items are all inquiries that have been made on your credit report
as well as anything that is considered a matter of public record such as
bankruptcies, foreclosures and tax liens.
To repair or report errors on your credit report, you must obtain a copy of your
personal report and score. The reports themselves are not uniform from company
to company.
Experian may not list all the data of Equifax and vice versa. So, be sure to
obtain credit history reports from the same company as the creditor who turned
down your application. In some states, that may require a small fee, but after
September 1, 2005 all states will have to be in compliance with providing a free
credit report.
Once you have the report, verify the information. Every report is also scored.
Scoring is the system that creditors use to determine your credit experience.
These scores are valid for all three companies and are uniform in value.
Credit scores range from 375 to 900 points, but those numbers mean little on
their own. A score of 650 or better usually indicates a very good credit
history. Scores between 620 and 650 are considered average, while scores below
620 may prevent a person from getting a loan. If they do receive one, it is
likely one with prohibitive interest attached.
If you look at all the information on your credit report and it's correct, then
you are faced with having to improve either your payment history, lower the
number of debts.
If the score is low because you possess very little credit history, investing in
a secured credit card can help generate good feedback to your credit report or a
co-signer who can provide the creditor with a good credit history as security
for your lack of one.
Inaccurate information, however, such as reported late payments that you
disagree with or a listing for a debt that is not yours is repairable. Some
companies offer debt consolidation or credit repair. Before getting involved
with either type, be sure you thoroughly check out the company to avoid scams.
Doing the credit repair on your own is simple enough. Write a letter, detailing
the inaccuracy to the reporting company. Send the letter and copies (copies
only) of any documents supporting your claim to the credit-reporting agency.
Some agencies allow you to do this online through their websites; however, if
you need to send them hard data it's better to use regular postal mail.
The credit agencies are then required by law to investigate the item in
question, usually within 30 days. They must forward all information to the
reporting creditor and if they cannot verify the veracity of their report or the
creditor does not respond, the report will then be changed and updated to
reflect the data provided.
The company must then notify you in writing of the change as well as provide you
with an updated credit report.
It's important to note, that if there is an inaccuracy on Experian that there is
likely a similar one on Trans Union and Equifax. Each company must be notified,
separately for each item.
Also, if you have more than one item you are disputing on your credit report,
then you may have to send a separate letter for each instance, to be certain
that each item is addressed.
While this can be a time-consuming task at first glance, it is the best way to
remove inaccuracies from your credit history and repair misinformation damage to
your credit report. If you request it, the reporting agency must also send
notices of any corrections to anyone who received your report in the previous
six months.
If the negative information reported to your credit history is accurate, then
only time can repair the damage of the negative score. Most information rolls
off after 7 to 10 years, but felony convictions, information on jobs paying you
over $75,000 a year or credit of more than $150,000 has no time limit.
If you had a car repossessed, you'll have to wait about 8 years to see the
repossession removed from your credit history. Open credit lines, whether the
information is negative or positive, will remain active on your credit history
whether you actively use the credit or not.
Applying for credit is never a fun, even for people who are considered to have
good credit. There is always an inherent fear of rejection by the creditor you
are applying for. If you are concerned about your credit history, keep an eye on
it.
It's recommended that you check your credit history once a year at least,
because in an age of identity theft, negative credit history can be part of the
collateral damage.
About the Author:
John Simpson works in software development. A few years ago, he got in trouble
with credit card debts. Now he's written a series of articles explaining how he
recovered, and repaired his credit. Find out how to repair your credit. Discover
why a good credit report is vital to your financial future, and how to make it
the best http://www.credit-repair-101.com/
|
