According to the credit bureaus themselves 76% of the information in a average credit report is wrong. So, how can this be fixed? Most credit report inaccuracies are due to credit bureaus mixing up people’s names, especially if it is a very common name. The first step in fixing any errors on your credit report is to get a copy of your credit report yourself and go through what’s on it. Typically, most creditors such as lenders use what is called a trimerge file. This is one report created from all three of the main credit bureaus and merged together. They are more accurate but there still can have mistakes.

Reading Your Credit Report

The other main problem with credit report errors is the consumer not reading or researching the account. Over my years in the finance and mortgage industries I have seen and read hundreds, if not thousands, of credit reports. Although, some are harder to read than others.

All credit reports follow a basic chart. There is usually a header at the top stating the meaning for each column. A typical heading and entry would look like this:

A typical credit report entry has the following details:

1. Account name (Citibank);
2. Account Number (sometimes these are purposely wrong to protect the account);
3. Date account was opened (Open);
4. Date account was last active (DLA);
5. Credit limit (4500);
6. Information if there were late payments (how often and how late);
7. The current balance;
8. There may be other headings for opening balance and / for a close date.

Most of these headings are self explanatory but the usual mistake in this section can be the dates. For instance an account might be open in June 2007 but open account might not be reported to the bureaus until August 2007. At the end of most credit reports is a list of phone numbers for all of the creditors listed.

How to dispute or correct a Credit Report Error

It is important to go through each entry on your credit report. Once you find a possible error in your credit report, research it yourself a bit further. Each possible mistake has to be handled separately and in a specific way.

Contact each of the creditors in question. Tell them you are disputing the account and ask how to get this fixed. Chances are they will give you the run around or tell you they can’t find the records.

The next step is to contact the three main credit reporting agencies. You will need to send a certified letter to each one of them stating that you are disputing this claim and ask for an investigation.

Next send a certified letter to the creditor. This may be the original creditor or the one who bought the account such as another lender or a collection agency. In this letter you should request that they validate their claim. They will return copies of signed contracts, receipts, and so on, if they return anything at all. According to the Fair Credit Reporting and Dept Collection Practices Act they have 30 days to comply with this request.

If the creditor does not reply by the deadline send another certified letter to the credit agencies stating that this entry is unvalidated and should be removed.

If this error is not fixed or removed from you report you have the right to sue them for violating the Fair Credit Reporting and Dept Collection Practices Act. This can be done on small claims court.

Choosing Your Battle

The above procedure has to be done for every possible error. As this will take time and money it is wise to choose your battle carefully. Disputing claims on your credit report is a good idea if the entry is a large amount; you are being harassed about it by the holder of the account, or an equally important reason.

Although, to the consumer this may seem like a big deal it might be a waste of time and money to dispute things like names misspelled, other names on your credit report (see below) or trying to change dates.

It is important to note that if there are errors on your credit report through no fault of yours there are things you can do. If, however, the entries that are thought to be errors are in fact due to bad credit or not paying accounts only time will fix the issue.

Typically, an item on a credit report will stay on for 7 years. But there are a few things that will stay on longer. Such as:

1. Bankruptcy will stay on for 10 years;
2. An application for a job with a salary of more than $75,000 has no time limit;
3. An application for credit or life insurance worth $150,000 or more has no time limit either;
4. An entry about a lawsuit or a judgment against you can be reported statute of limitations runs out, and
5. An entry if you default on a federally backed student loan

Important Facts About Credit Repair Companies

Businesses in this country contact people everyday about repairing their credit. What they do is they promise, for a fee, to clear up your credit report. Don’t do it. Don’t believe them. These companies may not do anything but just vanish with your money. Some of these places will claim that they can get you a new SSN. This is illegal. They may tell you not to contact any of the credit bureaus yourself or tell you to dispute everything. The bottom line is that these companies may want you to pay a fee up front BEFORE the work is done.

No one can legally remove accurate, positive or negative, information from a credit report. But the law does allow you to dispute an entry and ask for an investigation

Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.

You can contact the three main credit bureaus at:

1. Equifax (800-685-1111) - www.equifax.com
2. Experian (888-397-3742) - www.experian.com
3. TransUnion (800-316-8800) - www.transunion.com