December 7, 2024

Bucks Blog: Tips for Disputing Credit Report Errors

Checking the accuracy of your credit report is important, given recent reports that 5 percent of consumers may have errors in their reports that can result in higher interest rates on a loan.

The National Foundation for Credit Counseling has developed a list of “do’s” and “don’ts” for managing your report, which tracks your individual borrowing history. The major credit bureaus — Experian, TransUnion and Equifax — use information in the reports to create a credit score, which lenders use to decide if you are a good candidate for a loan and what interest rate you qualify for. Scores can also be used to determine eligibility for other financial products, like insurance.

Here’s the foundation’s list:

Review your report for accuracy at AnnualCreditReport.com. You’re entitled by law to one free report from each of the three major bureaus every 12 months, so you can check a different one every four months. Despite the availability of free reports, few consumers check them, the foundation says. Reviewing your report at least three months before a major financial move gives you time to dispute any errors and have them corrected.

Understand your rights. The federal Fair Credit Reporting Act provides protections for the accuracy and privacy of information in your credit file. The credit bureaus have dispute resolution processes in place. But it is up to the consumer to initiate the process by submitting the dispute form, either online or by phone.

Tara Siegel Bernard, writing for The Times, found that it’s better to submit a dispute in writing, to create a paper trail in case you need it later and to submit disputes to all three bureaus.

Credit reporting companies are required to investigate the items in question, usually within 30 to 45 days of the dispute being filed. The bureau receiving the dispute must forward all relevant information to the source of the information to begin the investigation process. After the provider’s investigation is complete, the results are sent back to the bureau. If the information provider finds the disputed information to be inaccurate, it must notify all three credit reporting companies, allowing each of them to correct the information in their files.

Not all errors have an equal impact. Some mistakes are more serious because they may have a negative impact on your credit score, like accounts that don’t belong to you, or credit lines listed with lower limits than they actually have or negative information that has stayed on the report longer than allowed. Those sorts of errors should be addressed immediately.

If you disagree with the results of an investigation, you can add a statement on your report — of 100 words or less — explaining the circumstances of the item. The statement will be included in your credit report when it is reviewed by potential lenders, as well as those who received a copy of the report in the recent past, if you request it.

Negative information that is correct will only be removed with time. Most negative information can stay on the report for seven years, and some information, like a bankruptcy, can remain on your report for 10 years.

Don’t use a credit repair company offering a quick fix, for a fee. There is little the company can do that you can’t do yourself, free.

Have you tried to dispute an error on your credit report? What was the result? Do you have other tips for people in similar situations?

Article source: http://bucks.blogs.nytimes.com/2013/03/04/tips-for-disputing-credit-report-errors/?partner=rss&emc=rss