How To Correct False, Misleading, Or Incomplete Information On Your Credit Report

Before you can demand your legal rights, you must thoroughly know your legal rights. These are contained in the four sections of the Consumer Protection Act. The Fair Credit Reporting Act (FCRA) is primarily concerned with credit bureaus and credit reports. The intent of the FCRA is twofold:

1. To protect you against credit abuses.

2. To provide you with the legal tools to repair and improve your credit.

What can you do if your credit report contains false, misleading or incomplete information that now injures your credit?

The Fair Credit Reporting Act (FCRA) protects you against credit abuse that might result from an unfair summary of your credit history. The FCRA grants you certain rights as a credit consumer. These basic rights are the key to eliminating negative marks in your credit report and to reestablishing good credit. Your rights as a credit consumer include:

• The accuracy of your credit report can be challenged.

  You have the right to dispute any information in your report that you feel is false, obsolete, incomplete, or incorrectly entered. By disputing an entry, you are challenging the accuracy of what is reported on your credit statement and you neither admit nor deny your liability for the debt.

  The law also clearly defines the length of time negative information can remain on your credit report; older information is considered obsolete and must be removed. For example, a bankruptcy or an unpaid IRS tax lien will remain on your report for 10 years. Generally, most other types of information are considered obsolete after 7 years.

• The credit bureau must verify any information challenged.

  Credit bureaus are only considered reporting agencies; they need not prove the accuracy of the information - unless it's challenged.

  Once an individual challenges the information, the credit bureau must contact the creditor and request that the creditor verify the information exactly as it appears on the credit bureau report. Unfortunately, any person or company - whether a legitimate creditor or not - can include negative information on your credit report without your consent or knowledge - and without the need to first prove it is true.

  The credit bureau must provide proof of the entry within 30 days, unless there is some good reason for delay, such as an overload of inquiries to the bureau.

• Any information that cannot be verified must promptly be deleted from the credit bureau files.

  In this way, the burden of proof goes back to the original creditor. And, the information needed for a creditor to verify is rarely easily accessed. Old files will need to be found and checked for accuracy and completeness. The creditor must then respond to the credit bureau within the 30-day time limit to present proof of the adverse information, which is usually too difficult for most creditors to do within the required time. In essence, many negative remarks are deleted through creditor default!

• If the original creditor verifies the information within the time limit, the negative marks must remain in your file.

  You have the right to submit a consumer statement of your view of the problem, if you still feel the reported information is in error (see the sample consumer statement at the end of this section). The credit bureau must attach your explanation (100 words or less) to any credit report it later issues in response to a credit inquiry.

Correcting Your Credit

After verifying information in your credit report, you can now begin to take steps to repair your credit based on the following suggestions:

Identify the negative marks on your credit report.

Most bad marks are "past dues." A "past due" is noted whenever your payment wasn't received within 30 days of being due. In your analysis, determine what percentage of your total accounts fall within the delinquent category. How to contest these negatives or "dings" is discussed in a later section.

Your payment must actually be credited to your accounts before the due date, not merely mailed by that date-to avoid a late payment mark. Most "past due" notations are correct. However, there are times when entries are made accidentally, or the mail delivered your payment late, or there was a delay in processing your payment.

If a creditor sees too many credit inquiries on your credit report, it can be interpreted that you are in financial difficulty and seeking more credit as a solution. Creditors can refuse credit when there are too many inquiries. Each creditor determines how many inquiries are "too many".

To offset the problem, you can have a 100-word (or less) statement added to your credit report to explain in a positive way why you have so many credit inquiries. Perhaps you were shopping for the best interest rate for a loan and inadvertently, too many inquiries were made. Usually an application submitted from an internet website will generate a credit inquiry automatically.

Review Your Account Profile

The "Account Profile" column on the credit report contains a summary rating for each of your accounts. Ratings include: "positive", "negative", or "non-rated":

• "Positive" means good credit; you pay on time.

• "Negative" means serious credit problems. Perhaps you have defaulted on a major debt or filed bankruptcy.

• "Non-rated" means a few late payments.

A "non-rated" notation can still weaken your credit. Each negative or non-rated entry states a code explaining the character of the problem. To effectively improve your credit history, your objective would be to protest and remove any negative or non-rated summary.

Challenge the Negative or Non-Rated Remarks

Assert that the negative or non-rated remarks are in error, and the credit bureau must verify the remarks. Send a letter for each item you want to challenge. Send a protest letter only if you feel the negative or non-rated summary is incorrect due to problems with the creditor, is factually incorrect, or was due to circumstances beyond your control. In the event the negative information is factually correct but there are justifiable reasons for the negative entry, then it is better to add a 100-word statement of explanation to your credit report.

If you find the code "charge-off," the creditor thinks your debt is uncollectible. Protest that this comment should be removed if the debt was satisfied; it should not be reported as a charge-off. If there were a series of "past dues", perhaps those payments were delayed when you changed addresses.

You may also dispute owing the creditor the amount claimed as delinquent or charged-off. Were you billed for unsatisfactory goods or services when the creditor failed to resolve the problem to your satisfaction? Did you in turn delay your payment? There are many possible reasons you may have for disputing a negative credit mark.

When you write your letter of dispute to the credit bureau, carefully list each negative or non-rated notation you want to challenge and then draft one letter. Using a separate letter for each dispute may cause the credit bureau to consider your requests as "frivolous and irrelevant". They will then be able to legally ignore your request for an investigation. Remember, a credit bureau cannot by itself, verify credit information. It must rely on the creditor to defend against your dispute. Only in this way can the negative mark be verified and allowed to remain on your credit report.

Use only general reasons for your dispute. Avoid specific reasons, such as incorrect dollar amounts or dates. Your dispute should only state that you never owed that creditor $2,000. You are not obligated to mention what you do owe. For a disputed date, simply claim that you never incurred that debt on that date. If you fully paid the debt, say so, but don't say when it was satisfied. Do not give the credit bureau more negative information to add to your report.

Communicate all requests in writing.

Successful credit repair requires everything to be in writing. When disputing items, never waste time communicating with a credit bureau either by telephone or in person, mainly because your communication must state certain information.

Letters that originate from a credit repair company or an attorney are usually either automatically returned or sent to the bureau's legal department. So, never send a form letter to the credit bureau. In essence, a handwritten letter starts the process more effectively. Include a copy of your credit report to ensure the bureau checks the right file. Be sure to sign, date, and include your address, date of birth and social security number in the letter. Copy your letter for your file. Send your letter certified mail, return receipt requested. This proves when the bureau received it.

Wait 30 days for a reply.

If the credit bureau does not reply within 30 days, send a second letter demanding an immediate response to your initial request. The credit bureau should ultimately respond in one of three ways:

1. The credit entries are changed.

   The notations will be changed/removed because either the credit bureau verified that the notation(s) were in error, or the creditor failed to verify the disputed credit entry. The credit bureau is now required to reply to you within 30 days that the disputed credit entry will be deleted.

2. The creditor verifies the disputed item, so it stays on your credit record.

   The credit bureau's reply to you will contain the creditor's statement and/or documentation to verify the negative credit information. This does not mean there is nothing further you can do to correct your credit report. You then have other options:

1. Try again later. Challenge the negative item in a year or two, but then raise a different dispute.

2. Talk to the creditor directly.

   Most creditors are reasonable. Attempt to persuade your creditor that your claim is legitimate and the creditor can have the credit bureau correct your credit report. This commonly occurs.

3. You receive a preliminary response from the creditor.

   The credit bureau may first respond with a preliminary letter that acknowledges receipt of your letter and advises you that the bureau is continuing its investigation.

   If the credit bureau sends a preliminary response to request additional information such as canceled checks or evidence that a tax lien or judgment has been satisfied, you should respond quickly to the request.

   If the credit bureau asks you to verify your identity, send them a current phone or utility bill with account information they are already likely to have in their computer. Never send a copy of your driver's license, social security card or identification that reveals your place of employment.

   If you do not receive a final reply from the credit bureau within 30 days, then the negative credit information against you must be removed.

Order an updated credit report.

Once your credit repair process is complete, request an updated copy of your credit report. The law requires the credit bureau to send a free credit report update to anyone who has received a copy of the report within six months prior to any corrections or statements that are added to their credit report.

They will also send a free credit report update to anyone who requested your credit report for employment purposes within the prior two years.

You are also entitled to a free update. However, you must request it to receive it. Also request the bureau to send an update to anyone you know who has recently inquired about your credit.

You will probably not get results on every challenge the first time, but you can try again later with a different dispute. You will notice that the bureau has probably deleted some negative items only because one or more creditors failed to respond to the investigation within 30 days. If you still have negative marks, repeat this process. Bad credit cannot be repaired in a day; it takes diligence.

The following is a sample consumer statement letter that you can use as a guideline for your own consumer statement letter:

SAMPLE CONSUMER STATEMENT

Your name

Your address

Date

Name of Credit Bureau

Credit Bureau Address

To Whom It May Concern:

I am writing to request that this consumer statement be added as part of my credit bureau file, so that any credit inquiries will include this statement automatically:

As a result of (illness, layoff, divorce, death in the family, etc.) I was unable to pay my debts in a timely fashion during the period (state the dates). Since that time, I have (returned to work, improved my financial situation, gotten another job, etc.) and have improved my credit history.

Because this statement contains less than 100 words, I request that my full statement be included without alteration. Please send me a copy of my updated credit report as soon as the above has been completed. Thank you for your consideration:

Sincerely,

Your name

SAMPLE LETTER: LATE PAYMENT DISPUTE LETTER

Your name

Your address

Date

Name of Credit Bureau

Credit Bureau Address

To Whom It May Concern:

I am writing because my credit report lists the following accounts as reflecting late payments. These accounts have been paid on time and the information that appears is incorrect. Please verify the following accounts and update my credit report to accurately reflect my credit history:

Account Account No.

I would appreciate your sending me an updated copy of my file as soon as you have completed your investigation. Thank you.

Sincerely,

Your Name

SAMPLE LETTER TO CREDITOR - DISPUTING EX-SPOUSE'S ACCOUNT

Your name

Your address

Date

Name of Creditor

Creditor Address

Re: Account Number

Dear Mr./Ms. Creditor:

After reviewing my current credit bureau reports, it has come to my attention that your company has mistakenly recorded the payment history/liability for the account referenced above.

This account belongs to my ex-spouse (name), and is solely his/her responsibility. We have been divorced since (date) and I am not responsible for this account.

The Fair Credit Reporting Act states that you have 30 days from the date of receipt of this letter to remove all information from all credit bureaus you have reported this inaccurate information to, or send me written proof that I have signed documentation taking responsibility for this account.

I anticipate your prompt response.

Sincerely,

Your Name

SAMPLE LETTER: SOMEONE ELSE'S CREDIT INFORMATION INCLUDED ON MY CREDIT REPORT

Your name

Your address

Date

Name of Credit Bureau

Credit Bureau Address

To Whom It May Concern:

I am writing because my credit report lists the following accounts as mine. These accounts belong to someone else and the information that appears is incorrect. My social security number is: __________, and my current address is noted above. Please remove the following accounts and update my credit report to accurately reflect my credit history:

Account Account No.

I would appreciate your sending me an updated copy of my file as soon as you have completed your investigation. Thank you.

Sincerely,

Your Name

Credit Bureau Addresses

There are over 1000 credit bureaus in the United States. However, most creditors will request your information from one (or all) of the three largest. If you have been denied credit, have a dispute, or just want to know what's in your credit file, you would need to request a credit report from all three major credit bureaus. In addition, you would need to send a letter to all three major credit bureaus to feel certain that you have completely removed any obsolete information that may appear in any credit report a potential creditor may request. Here is the contact information for the three major credit bureaus:

Related Articles:

• Get Your Credit Reports

• Reading Your Credit Reports

• Credit Repair

• Credit Score

• Clean Your Credit Report

• How To Correct False, Misleading, Or Incomplete Information On Your Credit Report.

• Rebuilding and Restoring Your Credit FAQ

• Credit Reporting

• Credit Bureaus