Q) What is a Credit Report and Why is it Important?
Answer: Your credit report is a compilation of information about the way you handle debt. It includes information about how much debt you've accumulated, how you pay your bills, where you live, where you work, whether you've filed bankruptcy, and whether you've had a home foreclosed or vehicle repossessed. If it sounds like your credit report contains a lot of information, that's because it does.
How Does Information Get On Your Credit Report?
Credit reports are maintained by businesses known as credit bureaus or credit reporting agencies. Companies that you do business with have agreed to send your debt information to credit bureaus who then update that information in your credit report. Most of your credit card and loan accounts are updated on your credit report monthly.
Some businesses don't update your credit report until you've been seriously delinquent on your payments. For example, your cable bill isn't automatically included in your credit report, but if you fall more than six months behind on your payments, the bill might be listed on your credit report as a debt collection.
What Type of Information is Included In Credit Reports?
Credit reports include basic identifying information like your name, address, and place of employment.
Your credit report contains detailed information about your credit cards and loans. For credit cards, your balance, credit limit, account type, account status, and payment history are all included on your credit report. Loan balances, original loan amount, and payment history appear on your credit report.
Public records like bankruptcy, foreclosure, repossessions, and tax liens are listed on your credit report.
Credit reports include a list of businesses that have recently checked your credit history either as a result of an application you made or a promotional screening.
You Can (and Should) Check Your Credit Report
You should order your credit report at least once a year to make sure the information listed on it is correct. If you suspect you've been a victim of identity theft, you should monitor your credit reprot more frequently. You can order your credit report in a few ways: for free through a website the government set up for that purpose, for free via a promotional offer, or by purchasing from one of the three credit bureaus.
Credit reports include a list of businesses that have recently checked your credit history either as a result of an application you made or a promotional screening.
Why Your Credit Report is Important?
A variety of businesses check your credit report to make decisions about you. Banks check your credit report before approving you for credit cards and loans, including a mortgage or auto loan. Landlords review your credit report to decide whether to rent to you. Some employers check credit reports as part of the application process. Your credit report affects many parts of your life, so it's important that the information included is accurate and positive.
Q) How to Order Your Annual Credit Report?
Federal law - the Fair and Accurate Credit Transactions Act of 2003 - gives you the right to a free credit report every year from each of the three credit bureaus - Equifax, Experian, and TransUnion. This is your annual credit report.
There are a lot of impostor websites on the internet promising to give your free annual credit report. These sites typically request your credit card information and enroll you in a trial membership to a credit monitoring service. If you don't cancel the trial, your credit card will end up getting charged for a full period of the credit monitoring service.
The true website for ordering your annual credit report doesn't require a credit card and doesn't ask you to sign up for any trial subscription. You can order your annual credit report and receive it the same day.
3 Ways to Order Your Annual Credit Report
1)To order your annual credit report online, visit www.annualcreditreport.com. If you are suspicious about a link to the legitimate annual credit report website, you can type the address directly into your web browser making sure not to misspell the address.
2)You can also order your annual credit report over the phone by calling 1-877-322-8228. If you choose this option, there will be a verification process to ensure you (and not someone else) are actually ordering your credit report. If you are deaf or hard of hearing, you can call 1-800-821-7232 to order your annual credit report.
3)Finally, you can order your annual credit report via mail. To do this, you should first download and print an annual credit report request form. The form requires an Adobe viewer. Once you have completed the form, you can mail it to: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281
When you order by phone or mail, you will receive your annual credit report via mail within 2 to 3 weeks.
You must order your annual credit report using one of the methods listed above. You cannot receive your government-granted annual credit report directly from the credit bureaus. Note that all the credit bureaus have a free credit report offer, but these offers require a credit card and you may not be able to order another free credit report next year.
You can order all three annual credit reports at one time or you can space them out over the year. For example, you might order your Equifax annual credit report in April, Experian in August, TransUnion in December, and start over with Equifax the next April. This allows you to monitor your credit reports throughout the entire year.
Q) How to Correct Errors on a Credit Report
You just discovered errors in one or more of your credit reports, or even worse, accurate references to late payments or other negative issues that lower your credit scores. Take a few deep breaths and try to stay calm, because credit report errors can be fixed. It's possible to remove many negative items, too--and without help from companies that promise to repair your credit.
How To Dispute Errors on Your Credit Report
1)Make a copy of your credit report and circle every item you believe is incorrect.
2)Write a letter to the reporting agency (the address will be printed on the report). Explain each dispute and request an investigation to resolve the issues. If you have supporting paperwork, send it along, coding pages to match dispute paragraphs. Do not send your originals.
3)Send all materials by certified mail, return receipt requested, so that you can prove the packet was received.
4)Send a similar letter of dispute to the creditor whose reporting statements you disagree with. Refer to a billing statement to find the correct address for disputes, because it's usually different from the payment address.
If your dispute involves personal information, such as your current address, enclose a copy of your driver's license or a utility bill in your name to verify your residence.
The reporting agency will initiate an investigation, contacting your creditors to verify the accuracy of the information. If the creditor cannot verify that the entry is correct, it must be removed. When the investigation is complete, the agency must send you a free copy of your report if changes were made.
If the investigation uncovers an error, you have the right to ask that a corrected version of your credit report be sent to everyone who received the report during the past six months.
Tip:
Contact your creditor first, then allow a bit of lead time before you submit the dispute to the reporting agency. By the time the dispute is verified, the creditor will hopefully have corrected the error.
Online Disputes
You can initiate an investigation from many online credit reports by following the links provided and checking the disputed items as directed. There sometimes isn't a place for remarks--you'll simply check a multiple-choice reason for each dispute.
If Changes Aren't Made
If the credit reporting agency says the original information is accurate, it must provide you with a written notice that includes the name, address, and phone number of the person who made the report. If you still disagree, initiate a second investigation.
Unfortunately, in the real world the reporting agencies often try to sidestep that requirement, giving you standard, computer-generated information rather than the facts you need to find the person or department who made the negative report. Keep plugging away until you have the answer you're looking for.
If your attempts to correct an entry are unsuccessful, you can ask the reporting agency to insert a 100-character explanation next to it that explains your side of the story.
Sometimes You Hit a Dead End
I know from personal experience that it's sometimes difficult to have information changed, even if you can prove it is incorrect. A family member has not been able to have an incorrect employer notation corrected, even though he has not worked at the company for many years. The standard response from the credit reporting agency is that they would not have the information if he had not included it on an application for credit.
They refuse to remove the incorrect notation, even though he has provided them with a letter from his current employer and several W2s.
Why did that happen? Somoneone likely keyed-in a previous employer as a current employer. Sometimes you simply cannot get through to them that errors exist.
Negative Entries
Bankruptcies remain on your credit report for ten years, while other types of entries are generally reported for seven years. If an account that was previously past due has been brought current, and has been either paid off or kept current for at least a year, the creditor might agree to an early deletion of the past due references.
Write a letter to your creditor and request that the negative entries be removed. They'll often comply if they see you are up to date and handling your account in a positive way.
Another tactic you can use to clean up your credit report is to dispute a negative item even if you believe it is accurate, but you'll have to follow your conscience to decide if that's an ethical way to go.
Q)How long will a debt collection remain on my credit report?
Answer: If the collection account is accurately reported, it will remain on your credit report for seven years. After that time, it's against the law for credit bureaus to leave the collection account on your credit report.
You can dispute the account from your credit report if it’s not your account, if the account was incorrectly sent to a collection agency, or if the account is older than seven years but is still on your credit report.
Q)Where Should I Send Credit Report Disputes?
Answer: You should send credit report disputes directly to the bureau who provided the report with errors. Here are the mailing addresses for each credit bureau:
Equifax
P.O. Box 7404256
Atlanta, GA 30374-0256
Experian
Dispute Department
P.O. Box 9701
Allen, TX 75013
TransUnion
Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000
When you send credit report disputes, you should also send copies of proof you have to support your claim. Send your dispute via certified mail, so you're able to track your letter.
Q)How To Get A Free Copy Of Your Credit Report?
The Fair and Accurate Credit Transactions Act of 2003 (FACTA) made it possible for you to get a free copy of your credit report. Through FACTA you can order a free copy of your credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – each year. You should take advantage of this privilege by ordering your credit report and using it to monitor your credit history.
Ordering Your Free Credit Report
There are specific ways to access your credit reports under FACTA
Online, by visiting www.annualcreditreport.com.
By phone, by calling 877-322-8228.
By mail, by printing a request form (Adobe viewer needed) and mailing it to the address listed on the form.
Free Credit Report Watch-Outs
Free credit report offers from other sources are not part of FACTA and may require you to sign up for a paid subscription service to receive the free credit report. If you use a search engine for the phrase “free credit report” or something similar, you can easily land on a scam site. To be absolutely certain you are going to the correct website, you can use the link from the FTC’s free credit report information site.
You should not contact the credit bureaus individually to get your free credit report.
Your credit score is not part of this offer and must be purchased separately.
Other Ways To Get Free Credit Reports
There are other situations in which you are entitled to a free copy of your credit report. These instances are outlined in the Fair Credit Reporting Act (FCRA) and include:
You had an application denied because of information on your credit report. This includes credit, insurance, and employment applications. You have 60 days from the date you learn of the denial to ask for a copy of your credit report. The company will send you a notice that includes contact information for the credit bureau who provided the report used in making the decision.
You are unemployed and plan to begin looking for a job within 60 days.
You are on welfare
You are a victim of identity theft and have inaccurate information on your credit report
Q) How to Dispute Credit Report Information?
Your credit report contains key information that identifies you and how you've paid your bills. Whenever you make a credit-based application, your credit report is reviewed to help make a decision. If, for some reason, your information is reported incorrectly, it could cause you to be denied for services for which you would otherwise would have been approved. That's why it's so important to check your credit report periodically for errors.
If you find mistakes on your credit report, the Fair Credit Reporting Act, FCRA, gives you the right to submit a credit report dispute to remove inaccurate information.
Review Your Credit Report
To find out if there is any incorrect information on your credit report, you need a copy of the report. Under federal law, you have the right to one free copy of your credit report from each of the credit bureaus annually. See How To Get A Free Credit Report for details on ordering your annual credit report.
Review your report thoroughly to make sure the information reported is correct. If your credit report has incorrect information, the Fair Credit Reporting Act (FCRA) gives you the right to dispute the information.
File A Credit Report Dispute
When you find something incorrect in your credit report, you should alert, in writing, both the credit bureau who provided the report and the information provider. This is the process to dispute credit report information.
If you have statements or cancelled checks that support your claim, include copies of them with your statement(keep the originals for records). In your statement, include your name, complete address, the information you are disputing, and the reason the information is not accurate. It will be helpful to include a copy of your credit report with the disputed information highlighted.
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 sent.
The Credit Bureau Responds To Your Dispute
The credit bureau has 30 days to investigate your dispute and respond to you, in writing, 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.
If there is inaccurate information in one credit bureau’s version of your credit report, it’s likely that the information will be inaccurate on the other two bureaus' reports as well. You should check all three credit reports to be sure that the information in each is complete and accurate.