Disputing inaccurate data on credit report

Dear Debt Adviser,
I just found out I have a negative listing on my account that I know is not mine. I tried disputing it with the credit agencies but it came back verified. The agency gave me the name of the collection agency to talk with them directly about it. How do I write a letter regarding this?
-- Kami

Dear Kami,
You and a few million other people are dealing with the fallout of inaccurate credit reporting every day. Billions of transactions are reported to the three major credit reporting bureaus each month. Numbers can get transposed, data can be corrupted and any number of things can happen from the time you swipe your card until your payment shows up on your credit report. To me, it's a minor miracle that the system works as well as it does. It's the sheer size of the system and the number of moving parts it has that makes correcting inaccurate information a bit tricky. However, it can be done, and I can help you do it.

The problem of accurate reporting of credit data is so important to our financial system that Congress updated the laws on this matter, the Fair Credit Reporting Act, or FCRA, in 2003 with the Fair and Accurate Credit Transactions Act, or the FACT Act. In my own small way I did my part as well when I wrote the book "Credit Repair Kit for Dummies."

This is not personal. Although you may be upset, being cool throughout this process will help you get through it. Inaccurate information happens; the bureaus know it and everyone really does want accurate data on your credit report. Inaccurate data serves no purpose in the credit reporting system. So here's what you need to do:

You must communicate with the collection agency and I suggest you do it in writing and keep copies of all correspondence. You'll find the address for the company and other needed information on the credit bureau report. I recommend using a letter such as the one included on the next page.

Send the letter certified mail with return receipt requested. Include a copy of the page from your credit report with the item on it. Circle the item so that the person who gets the letter has an easy time identifying the trade line. I'd like to tell you that this always resolves the problem, but the truth is that sometimes it does, and sometimes it doesn't.

If the collection agency corrects the item you can ask the credit bureau for a free copy of your credit report to be sure it's actually gone. If not, you have other options depending on what response you get or if you don't get one at all.

If a company knowingly reports inaccurate information to the credit bureau it can be sued under the Fair Credit Reporting Act. You can also complain to your state's consumer protection agency. Before you take legal action, I'd recommend that you try more than once to get the creditor to remove the inaccurate information by escalating your complaint within their company.

Be calm and professional, have a glass of wine if that helps. (I'm Italian so, for me, wine helps everything.) Call them and ask for a manager. Explain you sent a letter, who signed for it and ask for action. Keep notes of your call and move up the chain of command if you must.

Know that it may take longer than you would like to get this resolved. The biggest challenge you will face is that both the credit bureau and the collector believe the information is correct and it may take time and perseverance to convince them otherwise.

Lastly, I know this shouldn't have happened and it's not your fault. I suggest you chalk it up to part of the price of living in the 21st century American financial system, with all of its other pluses.

Good luck!