How To Fix Your Credit Report
There are plenty of compelling reasons people should want to have a good credit report. A solid credit report leads to the sort of credit score that makes mortgage and auto lenders eager to give you the best interest rates available. Simply put, it means you can save a lot of money in interest payments over the years, especially with the sort of big-ticket items you typically need a loan to buy.
While most of the work involved with having a good credit report and score is in our hands, your good credit can sometimes require the credit bureaus not making errors. Sadly, they are far from infallible. A Federal Trade Commission (FTC) study conducted last year found that five percent of consumers had errors on their annual credit reports that could cause them to have to pay more interest on their loans. Furthermore, the FTC study also discovered that 25 percent of people found errors on their credit reports.
Which is why it’s so important to catch and correct any errors that show up on your credit report as soon as you possibly can. A recent story in US News & World Report provides tips on how to do that. Here are some of the suggestions, provided by reporter, Jenna Lee:
- Review those reports. You can’t fix what you don’t know about. So the very first step to ensuring that a faulty credit report won’t cost you serious money is identifying any errors. That is easy to do now that the law entitles Americans to a free credit report each year. All you have to do is go to AnnualCreditReport.com and request a report from each of the three major bureaus, TransUnion, Equifax and Experian.
- Take a very close look. Once you receive your credit reports, take out that magnifying glass and look for errors. In particular, pay close attention to account details that are wrong and, even worse, fraudulent accounts (i.e. ones you didn’t open).
- Get proof you’re right and they’re wrong. The credit bureaus aren’t just going to take your word for it that they’ve goofed. You’ll have to assemble documentation that highlights their errors.
- Write a letter. Once you have all of the information you need to dispute any errors, you’ll have to alert the credit bureaus of the mistakes. Do that by writing a letter to each bureau. The FTC provides a sample letter that makes it easy.
- Be prepared to wait. Sending in a dispute letter obligates the credit bureaus to act, which generally takes place within 30 days. If you don’t hear anything back in that timeframe, be prepared to follow up.
- Remain vigilant. The good news, as Lee writes in her story, is that the FTC report found that four out of five consumers who disputed an error had at least some success in correcting the problem. But Lee offers up some important advice for even those folks who are successful. “New errors could be introduced in the future,” she writes. “Continually monitor your credit to ensure your information remains as accurate as possible.”