Your credit report holds a lot of sensitive information, from where you live to if you've ever been sued to whether you pay your bills on time. Companies sell those reports to companies that want to check your credit: lenders, landlords, employers, and insurance companies, just to name a few.
While credit reporting companies try very hard to get everything right, mistakes happen. And when you’re trying to get a loan, a credit card, or an apartment, even one mistake can result in rejection.
Worse, sometimes those “mistakes” aren’t accidental, but brought on by identity theft – when someone else uses your social security number and other personal information to get a credit card in your name. When he doesn’t pay the bill, the black marks go on your credit report – and that can haunt you for years.
The first step toward correcting mistakes – intentional or accidental – is to order a copy of your credit report. Once a year, you’re entitled to a free copy from each of the three national credit reporting companies: TransUnion, Equifax, and Experian. All it takes is a quick trip to annualcreditreport.com to order your free report.
If you see any errors on your credit report, it’s time to take more steps to correct them. Contact the credit reporting company in writing with a detailed description of the inaccurate information, and include copies (never originals!) of any documents to support your position. Explain why you’re disputing their information, and ask them to correct or remove the error. Send the letter by certified mail, with a return receipt requested – that way you have proof that the credit reporting company got your letter. Keep copies of everything: your letter, your backup documents, and your mailing receipt.
Once they receive your letter, the credit reporting company has to investigate. They also have to send the information you provided to them to the company that gave them the incorrect information – that company is also required to investigate your claim, and report their findings to the credit reporting company. If they find out you were right and they were wrong, they have to tell all three national credit companies – and all three will correct their files.
After all the investigating is complete, the credit reporting company will send you the results in writing, along with an updated free credit report (if your dispute resulted in an change).
Plus, the credit reporting company to send notice of the correction to everyone who pulled your credit during the previous six months… but only if you ask them to do it.
If, for some reason, your dispute doesn’t get resolved, you can ask the credit reporting company to include a “statement of dispute” in your file for future credit reports. At least that way someone who pulls your credit will know that you believe there’s inaccurate information listed.