Your credit report is needed for many purchases and credit lending decisions but many consumers do not realize that there may be mistakes and inaccurate information on this report. If you are like most consumers then you probably figure that the credit report agencies do their job and no mistakes are made. Many consumers are surprised to learn the number and types of errors that can show up on a credit report, and do not understand how to dispute or remove information that is mistaken or should not be on the credit report. It is advised that you check your credit report at least once every year, and every consumer in America is entitled to a free copy of their credit report from all of the major credit reporting bureaus on a yearly basis.
The details of your credit report will determine your credit score, that magic number used by companies and individuals to make a decision on whether or not you should be given credit. Your credit history and score can also affect your employment, your living arrangements, and even your car insurance rates in some states. This is because it is becoming more common for employers, landlords, and others to check the credit score of a possible tenant or employee before making a final decision. Many credit reports contain errors that are not noticed or corrected, and these errors can drag your credit score down significantly. You should check your report from each of the major credit reporting agencies, because each credit report may be different and contain different errors.
The Most Common Errors Found On Credit Reports
There are a number of common errors that you should look for when you check your credit report periodically. First you should go over all of the accounts listed on the report and ensure that all of the accounts are yours. Mark any accounts that are not yours to be disputed with the agency. You also need to look at all of the information listed for each account for any inaccurate information. Look at the payment amounts and the dates of the payments to check for information that is not correct. Mark any errors that you find so these can be disputed. Check the addresses listed on your credit report to make sure that they are all accurate and actually belong on your credit report. Sometimes incorrect addresses are listed and these need to be disputed with the credit agency.
When you are checking your credit report for inaccurate information make sure to check the full spelling of your name and each number of your social security number. A misspelled name or one wrong number in the social security information could cause your credit report to show accounts that are not yours but belong to someone else instead.
Another red flag on your credit report can be found with any account which shows the last date of activity as more than 7.5 years in the past. There is a limit to how long a derogatory entry may stay on your credit report, and this can range from 7-10 years. Most agencies remove accounts that are older than 7 years. If these accounts show up on your credit report then you may be able to dispute them and have them removed because of the age of the entries.
Dispute Credit Report Errors For A Better Credit Score
There are 3 major credit reporting agencies, and these are TransUnion, Equifax, and Experian. Each agency creates their own credit report for every consumer and the law allows you to request a copy of your credit report from each of these agencies. When you find errors or information that does not belong to you then you need to dispute these entries with the agency for the credit report where the errors are found. Disputing a mistake on your credit report is not difficult but can take some time.
When you find an error on your credit report the first thing you should do is make at least one copy of the credit report. On the copy you will need to mark or underline the information that is inaccurate, preferably in red ink so the mark is very clear. You will also need to take copies of any documentation that you have concerning the errors found. This may be payment receipts for credit cards, a copy of your license or state ID showing the correct spelling and address, or any other documentation that you have to back up the claim that the information is wrong.
Once you have all your documentation together it is time to write a dispute letter to each agency that has errors on your credit report. In this dispute letter explain what errors are present in your credit report or what accounts are out of date and should be removed. This letter should be mailed together with copies of your documentation and a copy of your credit report with the errors clearly marked. Make sure to include a copy of your photo identification as well. If possible send this package using certified mail with a return receipt requested. This will cost more but offers proof that the agency received your dispute.
Once the agency receives a dispute then 30 days are allowed for a full investigation into the disputed matter. This time limit is set by the Fair Credit Reporting Act. After the agency has investigated your dispute claim then you will receive notification from the credit reporting agency of the investigation results. This notification will detail any steps taken, including the removal or correction of inaccurate information. You will also receive an updated copy of your credit report from the agency showing the corrections made. Using certified mail with a return receipt shows when the agency received your dispute and ensures that the 30 day time limit is followed.
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