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How to Correct a Mistake on Your Credit Report

Consumers may know that their credit score is their personal financial barometer: It’s what creditors use to figure out if you’re a good credit risk or not. What consumers may not know is that their credit reports may be chock full of errors. Such mistakes can prevent you from buying a home, being approved for a car loan, or getting a lower interest rate on a credit card. How pervasive are errors on credit reports?

A study by U.S. PIRG concludes that twenty-five percent (25%) of credit reports contain errors serious enough to result in the denial of credit, while seventy-nine percent (79%) of all credit reports have only some or minor errors. But not to worry, mistake, while not easy to fix, can be corrected! And even though it’s a pain in the neck, it’s important to stay persistent and document all your steps. Here’s how:

Steps to Take . . .

Get a copy of your credit report from all three leading agencies. You can do this online or by phone from each of the big services.  Analyze all three reports thoroughly, and make a list of any items you think are suspicious or are out of whack.  (Also note any discrepancies among the three).  It’s always a good idea to rank each item according to how damaging it actually is to your overall credit rating – so you’ll know where to focus your efforts. Start with tackling the most damaging factors first.

The most damaging factors are things like bankruptcy, foreclosure, repossession, loan defaults, court judgments or collections. Less damaging aspects (though still negative) include late payments, credit rejections and credit inquiries. (Having too many inquiries in a short time can be perceived as a problem and will lower your credit rating a bit, although with time this goes away on its own).

If you find genuine, Defcon-5-type mistakes on your report, contact the creditor(s) who made the error right away. Request in no uncertain terms that they clear it up, and ask them to report the mistake to the three main credit agencies. You should also contact the credit bureaus directly, in writing. When writing your dispute letter to the credit bureaus, be sure to include a clear explanation of your reasoning, along with any relevant evidence or documentation that helps support your case. Make photocopies of all correspondence, and be sure to send everything via registered or certified mail, so you’ll have a record of when it was sent and received. Even though we’re in the digital age, credit bureaus still want report challenges sent via regular mail.

To protect your case, you’ll need to create a good, organized system, such as a checklist or spreadsheet, to keep track of all your correspondence, and where each issue stands. Be patient, too. Often it takes multiple phone calls and letters before you achieve the resolution you want, so it’s helpful to have all records of previous times you have written or called, along with copies or notes on the company’s response. Each time you talk to a credit bureau, make sure to record the date and time, the name and title of the person you spoke with, and whatever was agreed upon as a result. Even after you’ve managed to resolve an error, it’s a good idea to hold onto your paperwork for at least a year: It’s not uncommon for an item you’ve worked hard to remove to somehow, someday, reappear.

Make no mistake, there’s no shortage of consumers who find themselves fixing a toxic credit report. The key is to be organized, polite but persistent —and correct the problem before it becomes even a bigger issue.

Key Contact Data

Federal Trade Commission consumer response center (202) 326-2222
Equifax P.O. Box 740241, Atlanta, GA 30374  (800) 685-1111
Experian P.O. Box 9556, Allen, TX 75013  (888) 397-3742
Trans Union Corp. P.O. Box 2000, Chester, PA 19022  (800) 916-8800

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