How to correct an error on your credit report- Free e-book

As mentioned in yesterdays post, sometimes there are errors on your credit report. How do you correct them and have them removed?

One way would be to work with a credit repair company. However, you can save money by doing it yourself.

Step One
You'll need to have a copy of your credit report (Click here to learn how to get a free credit report). With this, you'll be able to reference the exact information and how it is being reported should you need to provide it for documentation. Get any other proof of the error that you have (paid receipts, etc.) and make copies of them. DO NOT SEND ORIGINALS because if they become lost....

Step Two
You need to tell the consumer reporting agency (CRA), in writing, what you believe the error is and how it should be corrected. Your letter needs to include your complete name and address and clearly identify the items on your credit record that you are disputing. You need to state the reasons why you believe the information is incorrect and ask that the information be removed from your credit file. Mail COPIES (no originals) of any documentation that you might have. If you are mailing a copy of your credit file, mail only the page that has the trade-line that you're disputing, and highlight or circle the item that you're disputing. Here is a sample dispute letter from the FTC that you can use:

Date
Your Name
Your Address, City, State, Zip Code
Complaint Department

Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing.)

Step Three
Make copies of the letter and all of the documents that you're including. Mail the letter Certified and request a Return Receipt to the CRA. This will give you formal record of both mailing the letter and the CRA's receipt of the letter. Once the CRA has the letter, by law they must act on it unless they feel that it is lacking basis or otherwise does not have merit, completing an investigation usually withing 30 days.

Here is the address and contact information for the credit bureaus:

Equifax
P.O. Box 740256
Atlanta, GA 30374
(800)-685-1111
Web site: www.equifax.com

Experian
PO Box 2002
Allen, TX 75013
(888) 397-3742
Web site: www.experian.com

TransUnion LLC
P.O. Box 2000
Chester, PA 19022
(800) 888-4213
Web site: www.transunion.com

Mail copies of the information that you sent to the CRA to the creditor or other information provider that you dispute the item. Read this post for more information about disputing a billing error.

The CRA will contact the organization that provided the information that you are disputing, forwarding any relevant documents that you might have provided. If the information provider determines that there is an error, they must notify all three of the repositories (Equifax, Trans Union, Experian) of the error and have it corrected. They must report their actions back to the CRA who in turn will notify you in writing of the outcome. You will be provided another free copy of your credit report if any changes are made to it as a result of the investigation.

Step Four
Ask the CRA to send notices of the corrected information to anyone who has received a copy of your credit report in the last six months, just to set things straight with those that might have made a decision about you based upon the incorrect information contained in your credit report. For example, the loan that you received might be priced higher because of the error (read here for more information about how errors can effect your credit score). If the correction has a material effect on your credit score, then you should ask the creditor to reconsider your situation.

Step Five
If the investigation does not result in the item being removed or corrected, then you can ask that a statement about the account be included on your credit file and on future reports. This gives you an opportunity to have your statement appear on the credit report along with the trade-line information that you are disagreeing with.

If the information provider fails to respond to your dispute letter, the CRA will remove the information from your file. This may mean that if you bombard the CRA and information provide with dispute letters, the information provider may give up and not respond or change the information just to make you go away.

Otherwise, if the information is correct, and the information provider is unwilling to change it, the only other way for it to be removed is through the passing of time. Most negative information will be reported for 7 years, bankruptcy information is reported for 10 years. Other information like judgments can be reported for 7 years or until the statute of limitations runs out.

Get this free eBook from the FTC on Building A Better Credit Report

Related Posts
Disputing Credit Card Charges
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You can read this and many other informative personal financial posts at the Broke Grad Student who is hosting the 141st Carnival of Personal Finance!