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Fixing mistakes on your credit report

You do not send in the information that comprises your credit history -- your creditors do. However, you are responsible for the accuracy of the information contained in each of the three credit reports about your financial life.

Expect that there will be some problems. Statistics show that approximately 70 percent of all reports contain at least one error. These mistakes can sometimes cause you to be turned down for a loan or to be charged the highest interest rate on a credit card.

It's not difficult to get rid of mistakes, just time consuming. As the wheels of correction grind slowly, there may be weeks -- or even months -- of phone calls and exchanging of real mail or e-mail.

Steps to correct mistakes

There are standard procedures to get rid of mistakes on your credit report.

Report credit errors quickly. Even the smallest error could seriously dent your credit chances. If you find a mistake, send a separate letter to each agency where a mistake is found. Be sure to explain the situation in detail and include a copy of the credit report with the faulty information highlighted.

Any error that you find must be investigated by the credit reporting agency -- Experian, Trans Union or Equifax -- with the creditor who supplied the data. The credit reporting agency will remove from your credit report any errors a creditor admits are there. If you disagree with the findings, you can file a short statement in your record giving your side of the story. Future reports to creditors must include this statement or a summary of it.

The Fair Credit Billing Act requires creditors to correct errors promptly and without damage to your credit rating.

What is an error?

The law defines a billing error as any charge:
  • For something you didn't buy or for a purchase made by someone not authorized to use your account.
  • For something that is not properly identified on your bill or is for an amount different from the actual purchase price or was entered on a date different from the purchase date.
  • For something that you did not accept on delivery or that was not delivered according to agreement.
Billing errors also include:
  • Errors in arithmetic.
  • Failure to show a payment or other credit to your account.
  • Failure to mail the bill to your current address, if you told the creditor about an address change at least 20 days before the end of the billing period.
  • Questionable items, or any item for which you need more information.

Once you have written about a possible error, a creditor must not give out information to other creditors or credit bureaus that would hurt your credit reputation until the matter is resolved. And, until your complaint is answered, the creditor also may not take any action to collect the disputed amount.

The law is on your side
Keep in mind, the law is on your side if information on your credit report is proven to be false but is not removed, according to the Fair Credit Reporting Act. Under the law, you are entitled to actual damages, plus punitive damages that the court may allow if the violation is proved to have been intentional. In any successful lawsuit, you will also be awarded court costs and attorney's fees.

If you feel that a credit bureau has not responded promptly and fairly to your situation, contact the attorney general of your state or the Federal Trade Commission in Washington at 202-FTC-HELP.

You may also sue any credit-reporting agency or creditor for breaking the rules about who may see your credit records or for not correcting errors in your file.

A person who obtains a credit report without proper authorization -- or an employee of a credit reporting agency who gives a credit report to unauthorized persons -- may be fined up to $5,000 or imprisoned for one year, or both.

Who can see your report?

But a lot of people can see that report -- including everyone to whom you have applied for a loan or credit. So be careful when applying for credit.

When the companies you apply to check your report they can find out who else has been checking your report and determine what, when and how you have been applying for credit. That means if you have been getting turned down and are desperately applying for credit all over town your potential creditors will know.

Now, discover how the information on your credit reports evolves in a credit score.


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