An inaccurate credit report may have detrimental effects on a consumer’s financial health. Credit reports often contain mistakes. It is important that such mistakes are corrected before they affect a consumer’s ability to take out loans or open new credit card accounts. Under the Fair Credit Reporting Act, credit reports must be accurate.
If you find that your credit report contains errors the first step in remedying the problem is to contact your creditor. Your creditor has a legal obligation to update and correct the information on your credit report. The credit representative can check the information and if there is truly an error on your report he can immediately correct it and send the new information to the credit reporting agencies.
The second step is to file a written dispute with the credit reporting agency. This dispute should include copies of any supporting documents used to show the error on the report. The dispute should be sent certified mail, return receipt requested. Be sure to keep the originals and a copy of the documents sent to the agency for your records. The three major credit reporting agencies are Equifax, Experian, and TransUnion.
The credit reporting agency is required to investigate your dispute within 30 days and must notify you of the results. If you have not heard from the agency within 40 days, a follow up letter should be sent. This letter should ask the credit reporting company to confirm that the disputed information has been deleted from your report. This process should be repeated for all three of the major credit reporting agency.
The disputed information may reappear in your credit report if your creditor certifies that the information is complete and accurate. There is a possibility that the incorrect information can reappear on your credit report even without this certification. It is important to check your credit report three to six months after you successfully dispute an item. Under the Fair Credit Reporting Act, the credit reporting agency must make a reasonable effort to ensure that the disputed information does not reappear on your report. Unless the information is certified as complete and accurate the agency may not replace the deleted information. If the information is certified and reinserted, the agency must notify you and provide you with information about who provided it. Additionally, the agency must allow you to file a statement disputing its accuracy.
If the credit reporting agency refuses to remove the information, you may add a personal statement to the credit report that explains the negative information. The statement should not be longer than 100 words. Credit agencies are required to accept these statements if they explain why the information on your credit report is incorrect. This statement will be included every time someone requests for credit report. Additionally, if you have tried and failed to remove the disputed information from your credit report, you may be able to file a lawsuit under the Fair Credit Reporting Act.