Getting Credit Where Credit Is Due: Disputing Credit Reports

Under the Fair Credit Report Act, you have the right to a free credit report from each of the three main consumer reporting agencies once every twelve months, so disputing credit items is something that you should be prepared to do every year. Why? Because there is a reason that consumer advocates fought for this right: without policing and contesting your credit report, you may have unnecessary or false negative information on your report. Lenders would prefer to have as much data as possible about you – even if it is inaccurate.

The Public Interest Research Group, based out of Washington, D.C., claim a few shocking statistics:

• 1 in 4 credit reports examined contained an error that is serious enough to prevent someone from getting a loan or even a job.
• 79% of credit reports contained some type of mistake.
• 54% of credit reports contained serious errors in personal information, such as misspellings, outdated information, or data on someone else!
• 30% of credit reports contained “closed” credit accounts that were listed incorrectly as “open”.
  

There are good ways to dispute credit, and there are ways that are not so good. First of all, do not expect to get real help with your dispute from over-the-counter (or over the Internet) “credit clearing” agencies. Many of these companies are in the business of obtaining a fee and sending a generic letter to the agency in question. It is much better for you to do the work yourself. You are in the best position to monitor, contest, and track disputes at each of three major credit reporting agencies (Equifax, Experian, and TransUnion).

Disputing false information is an important part of protecting oneself against ‘phishing’, as well. Phishing is when illegitimate (typically criminal) actors try to sneak personal information from you. For example, in a common scam, an actor warns people that major credit card agencies now can “release credit report information” to anyone who asks. The scammer promises to prevent this from happening if you work with their “company”. This, or course, is a trick. By trying to prevent your information from getting into the hands of scammers, you are getting yourself scammed! You can find suspicious or unusual activity on your reports by checking them frequently.

You can sign up for your free annual credit report by writing:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

OR online at www.annualcreditreport.com.

If you choose to dispute negative marks in writing, your letter should be as specific and documented as possible. You can download a fairly effective dispute letter template by visiting the Federal Trade Commission’s (FTC) web site, or by calling the FTC at 1-877-FTC-HELP. Never send original documentation with your letter, but include copies instead. The law generally requires credit agencies to respond to your dispute(s) within 30 days, so request that action be taken within this timeframe.

If you do win a dispute and a negative mark is to be removed or updated, you have the right to ask the reporting agency to send a new copy of your report to anyone who received your misleading credit report within the last six months.

Even if an agency promises to remove an item, check your report periodically to make sure that the item has not been reposted. Requesting a copy of your report more than once per year will cost $9 at each agency for each extra report.

If you feel that you are being treated unfairly by a credit reporting agency, or by a company that is reporting a negative item, you have the right to file a complaint under state and federal consumer law. If the need arises, be prepared with detailed records to prove your case.