Taking the time to periodically get a copy of your credit report to ensure all the information being reported on you is accurate, can make the process of applying for credit in the future that much easier. What happens if you find errors on your credit report? How should you go about getting them resolved and how long does it take?
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If you find mistakes on your credit report, the Fair Credit Reporting Act (FCRA), gives you the right to submit a dispute to remove inaccurate information. The good news is that the credit bureaus have created processes (both electronically and via regular mail) that make the process fairly streamlined to resolve a dispute in a relatively quick time frame.
1. Get a copy of your credit report. All U.S. consumers can get a free copy of their credit reports once a year at www.annualcreditreport.com, the federally mandated website created by the FTC. You are also entitled to a free copy of your credit report if you are denied credit and your credit report was used by the lender to make the credit granting decision (referred to as an adverse action notice). The adverse action notice will explain why you were denied, which credit reporting agency was used to access your report and instructions on how to obtain a free copy of your credit report from the appropriate credit bureau(s).
2. Review for mistakes. Check your report carefully for any mistakes (indications of late payments that never happened, credit obligations being reported that are not yours, etc.)
3. Dispute any errors. If you find a mistake, complete the forms (online or via regular mail – whichever is easiest for you). You should also alert (in writing) the information provider (the lender who reported the information for example). If you have statements or cancelled checks that support your claim, include copies of them with your statement. In your dispute, include your name, complete address, the information you are disputing, and the reason the information is not accurate.
4. Disputes through the mail. If not disputing via the online option, send your credit report dispute via certified mail with return receipt requested. This way you not only have proof that you sent the dispute, but also that the credit bureau received your dispute. Keep a copy of the letter along with any enclosures you send.
By law, the credit bureau has 30 days to investigate your dispute and respond to you with the results of the investigation. Any data you provided about the inaccuracy of the information will be forwarded to the original information provider. The information provider is then required to investigate and respond back to the credit bureau. Once the investigation is complete, the credit bureau will provide you with the results, along with a free copy of your credit report if the dispute resulted in a change. You can request that the credit bureau send a correction notice to any company that accessed your credit report within the past six months.
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When the credit bureau receives notice of your dispute, they will place a code in your credit report indicating the item is under dispute. Some lenders may have rules in place that require additional review for any credit reports on credit applicants that have dispute codes on the credit report. In addition, many credit scores have special logic incorporated that will by-pass the disputed information for some of the credit attributes the score considers. Once the dispute is resolved, the code is removed or replaced to reflect the latest status.
If you see errors on your credit report from one of the credit bureaus, it is probable that same inaccurate information is being reported to the other two. Note, the credit bureaus have an electronic system to facilitate the sharing of dispute resolutions amongst each other to help ensure accuracy of your information across all three. However, for peace of mind, you may want to check that any inaccurate information has been corrected has been done so at all three credit bureaus.