Disputing credit report errors
By Susan Costello
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12:01 a.m. PT May 6, 2008
Great credit translates to lower interest rates on your home loan, credit cards, auto loans and other purchases. Especially in today's market place, with tighter liquidity and creditors scrutinizing credit histories. Improving your creditworthiness could make a huge difference in what you pay for carrying debt.
There are many things you can do to dispute mistakes or outdated items on your credit for the cost of a few stamps and an investment of time. Start by making sure all of the information in your credit report is correct and belongs to you. Anything accurate that is negative can only be erased with the passage of time. Negative information remains on your credit for seven years (with some exceptions), and bankruptcies show for 10 years. Typically the time period runs from the date that the event took place.
To dispute inaccurate or incomplete items on your credit report you need to make sure to contact the organization that provided the data to the Consumer Reporting Agency as well as the CRA. Your query is supposed to be investigated by the consumer reporting companies within 30 days. Your dispute should be done IN WRITING. While there are sample dispute letters all over the Internet, it's best to write an original letter and be detailed about your specific situation.
I usually advise my clients to include a copy of their credit report with their dispute letter, highlighting the inaccurate line items. Provide copies of any documents that support your dispute. Put your full name on the letter, your address as shown on your credit report, your social security number and your birth date. Direct the CRA to correct or delete the incorrect information. Important: Make copies of your dispute letter and any enclosures. Send it via certified mail, return receipt requested. And again, whatever you send to the CRA should also be directed to the corresponding creditor or company that provided the information about you to the CRA.
Once the CRA has completed their investigation they are required to send you the written results along with a free copy of your corrected credit report (if indeed an item was changed or removed).
Susan tip: an effective strategy for removing derogatory information on your credit report can be communicating directly with the creditor. Frequently clients come to me ready to purchase or refinance a home only to find out there is something derogatory on their credit. I have found over the years that creditors are motivated to work with the client to remove negative data because they want to preserve the client relationship, especially if there has been a lengthy history. Whatever resolution you obtain from your creditor must then be reported by the creditor to the three credit reporting bureaus in writing. Be sure to request copies of all communiqués.
For more detailed information you can visit the Federal Trade Commission Web site at www.ftc.gov and read about the FCRA (Fair Credit Reporting Act).
Susan Costello, 24/7 Mortgage Consultant, owns Home Sweet Home Loans. You can reach her at 530-273-8658.
