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Should You Dispute Negative Items on Your Credit Report?

The amount of loans you can borrow and the interest rates you have to pay depend on the accuracy of your credit report. Information like the amount of bills you missed over the past years, the number of credit cards you have had, and whether you have been arrested or convicted of a crime are important in the eyes of banks and credit card companies. Government-accredited credit reporting agencies make profits out of this information. Credit reports may be sold to insurers, banks and employers. If your credit report is not fully assessed, there is a chance that undetected inconsistencies may reflect badly on your credit-worthiness. Thus, the federal government protects the right of everyone to have an accurate credit report. The federal Fair Credit Reporting Act (FCRA) ensures that Americans can enforce necessary changes to correct any types of errors on their credit reports.

Before applying for a loan to finance a new house, car or business venture, make sure you have seen your entire credit report. Are the data accurate and updated? Do you see figures that seem to be above or below what you have thought of?

Identity theft is a prevalent crime. The Internet is being abused by many organized crimes to obtain private information and steal credit cards. Many victims of identity theft were not aware that the culprits were using their credit report to register new cards under their names. Only until the victims noticed a big drop in their credit score that they realized that their credit report contained unfamiliar credit accounts or transactions they didn’t authorize. Had these victims periodically reviewed their credit reports, the damages would have been less severe.

TransUnion, Equifax and Experian are authorized by the federal government to handle credit reports. Anyone can request a copy of his or her credit report from any of these credit reporting agencies.

Ordering a free copy is as simple as filling up an online form at annualcreditreport.com or calling the Annual Credit Report Request Service. There is also a request form that can be downloaded from the ftc.gov. Take note that AnnualCreditReport.com is the only site you need to access to send an online request. There is no need to contact each of the three agencies, but you can do so if you really want to double-check the accuracy of your credit report. The FCRA allows you to get a copy from each of the agencies once every 12 months. The consumer reporting companies may charge as much as $10.50 per additional copy of the report. Those who want to only get free copies should use these companies ‘ central website annualcreditreport.com instead.

All you need to do is provide your personal data like name, residence, birthday and social security number. These agencies may also ask for certain details that only you can provide to fully verify your identity. The security question can be your most recent mortgage payment, so be prepared to access your billing or bank statements in case these agencies ask you payment-related questions. Beware also that each agency may have obtained your data from different sources, and the information needed to verify your identity can significantly differ from one agency to another.

If you see inaccurate data on your credit report, the law gives you the right to ask for an investigation. This should be done with no charges. You may opt to hire a firm that specializes in solving credit fraud or fixing inaccurate credit report also known as a credit repair company, depending on the severity of the problem. However, always keep in mind that the law guarantees your free access to such type of investigation by credit reporting agencies and their information providers. The said parties are required by the law to make the necessary adjustments and corrections. You can directly contact the credit reporting agencies and their information providers when disputing your credit report.

Send a letter to a credit agency detailing the item you dispute. Include a copy of invoices, receipts or any documents to support your dispute. Be specific when lodging a dispute. Tell the consumer reporting agency the exact name of the disputed item on your credit report and the amount in question.

You can do so by providing the agency with a copy of your report with the dispute item circled in red. Use a certified mail with “return receipt requested” stamp so you can confirm if the agency receives your letter. You can use this as an evidence of inaction on the part of the agency if it fails to act on your request within a reasonable period of time, which is thirty days from the date of notification.

The agency is required by law to forward the mailed documents to its information provider. The information provider needs to review and investigate the disputed item and report back to the agency. The consumer reporting agency will in turn notify you of the results of the investigation or adjustments if there are any. If there is any changed or deleted items, the agency needs to update your record accordingly.

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