Credit reports: How to detect, report errors

February 12, 2013 9:21:54 AM PST
Forty-two million Americans have errors in their credit report, and half of those errors could keep people from getting mortgages and car loans.

The Federal Trade Commission offers a free credit report at AnnualCreditReport.com. That's where consumers can find errors, and ask for corrections.

"We always known that it happened as much data that goes into these things we'd be surprised if there wasn't but there is quite a lot of errors and a lot of them are minor but a fair number are significant," Steven Baker, FTC, said.

One in four credit reports has an error, according to the Federal Trade Commission.

At the Center for Economic Progress, Joyce Bonner helps her clients repair their credit. She said it's important to check the personal information on a credit report ? spelling of your name, social security, date of birth, previous employers and address.

"Often times that is the reason for an incorrect entry on your credit report because there is something in your personal information that is not correct," Bonner said.

In the credit history of the credit report, consumers should inspect any negative information, look for accounts not paid, debt not forgiven, and unexpected accounts that were not opened.

"When you pull the credit report, we have found instances the information didn't belong to that person because they were a victim of identity theft," Bonner said.

There are three credit reporting agencies- Experian, Equifax and Transunion. Consumers are entitled to a free report every 12 months from each of the credit bureaus. To dispute an item, contact the agency from which you received the report. Also, check the other two credit agencies for the same issue.

Center for Economic Progress
moneycoach@economicprogress.org
312-630-0248

Free Annual Credit Report
annualcreditreport.com

    How to file disputes with credit agencies:
  • Experian
  • Equifax
  • Transunion
  • You can also submit the dispute by mail or phone, the address or number should be on your credit report.

Tips on disputing errors on your credit report

Here are some tips on how to dispute credit report mistakes and lessen the chance of unwarranted blemishes that stain your credit profile:

- GET YOUR CREDIT REPORTS

The first step is to get a copy of your credit report from each of the major credit reporting firms - Experian, TransUnion and Equifax. Consumers are entitled to a free report every 12 months from each of the credit bureaus. You can get copies at www.annualcreditreport.com .

It's important to review your credit history periodically. For one thing, lenders can make errors when they report client accounts to credit bureaus. And if an identity thief opens an account in your name without your knowledge, that can hurt your credit until you discover what's happened.

- FILE A DISPUTE

If you believe there's an error in a report, you can submit disputes online at www.equifax.com, www.experian.com, www.transunion.com . You can also submit the dispute by mail or phone, the address or number should be on your credit report.

The FTC's study found that four out of five consumers who found erroneous information in their credit report and filed a dispute with the credit bureaus had a correction made to at least one of their credit reports.

- BE PATIENT

Onc e a dispute is received, credit bureaus are required to respond within 30 days. The credit bureau will contact the lender that provided the information that is under dispute. At that point, the lender looks into the matter. If a fix is made, the lender must alert all three credit bureaus of the error.

When the investigation is complete, the credit bureau must provide written results and a free copy of your report if the dispute results in a change. This report does not count as your free annual report.

- CONTACT LENDERS

Another option: Reach out to the lender on the account where the error showed up and ask that they update the credit bureaus with correct information.

- CONTACT THE CFPB

Not getting anywhere with the credit bureaus? Try the Consumer Financial Protection Bureau, a federal agency with the authority to write and enforce rules for the credit reporting industry and to monitor the compliance of the three agencies.

The CFPB also accepts complaints from consumers who discover incorrect information on their reports or are have trouble getting mistakes corrected. And consumers can contact the CFPB if they have issues with the improper use of a credit report, problems with credit monitoring and the improper use of a credit report, among other concerns.

The credit reporting agencies have 15 days to respond to the complaints with a plan for fixing the problem; consumers can dispute that response.

The CFPB also takes complaints on credit cards, mortgages, bank accounts and services, consumer loans and private student loans. To file a credit reporting complaint, consumers can do so at www.consumerfinance.gov/Complaint . Or by phone, by calling 1-855-411-CFPB (2372).

- AVOID CREDIT REPAIR FIRMS

The Federal Trade Commission has warned consumers against firms that offer services claiming to improve a person's credit report for a fee. Such firms can't do anything that you couldn't do yourself.

Since credit bureaus are required to check disputed information on a consumer's credit report within a few weeks, or remove it, a typical tactic of credit repair firms is to spam credit bureaus with such requests in hopes the negative items end up being dropped.

But credit experts say that often those items will show up again the next time the credit card company or other creditor issues an update to the credit bureaus.


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