Correct Any Errors in Your Credit Report
Your Credit Score Really Does Matter
Your credit score – those three, little, seemingly insignificant numbers – has a major impact on your life. Not only does it determine the interest rates you pay on loans or credit cards, more and more companies are using your credit score to grant or deny other amenities, like cell phone contracts or life insurance policies.
If you haven’t ever checked your credit report now is a good time. Errors that you’re unaware of could be preventing you from getting the best rates on a wide range of services.
This situation is more common that you might think: Estimates are that 80% of credit reports have errors. Errors range from the minor (misspelled name or former address) to the serious (accounts marked mistakenly as past due or in default). Fortunately, you can correct these errors though it is going to involve you doing some paperwork.
Step One: Identify the Errors
As you might expect, the first step in correcting errors on your credit report involves finding them. Legally, you can obtain a free credit report from each of the three bureaus – TransUnion, Experian, and Equifax – every twelve months. To request these, visit www.AnnualCreditReport.com. This is the only site that offers legitimate free copies of your report. Other sites, including those run by the bureaus themselves, will charge you either by the report or for ongoing credit-monitoring services.
Step Two: Notify the Credit Bureau
If you find a mistake any of your credit reports, the next step is to notify the bureau in writing. When you submit your dispute, make sure to include any and all background materials that back up your claim, and your written statement about the situation. The agency must investigate your dispute within 30 days of receiving it and notify you in writing of its decision. If the agency decides in your favor, it’s also required they correct the report and send you a copy of the revised report.
Step Three: Add a Consumer Note to Your Credit Report
Depending on the nature of your dispute, the credit agency may decide against your claim. This may occur if the agency doesn’t have sufficient evidence to support your claim, or if there was a miscommunication between you and the lender. Whatever the reason might be, you aren’t completely out of luck. Consumers are allowed to add brief statements to their credit histories to explain their versions of disputes. For example, if a late payment was due to a job loss or an unforeseen medical bill, a note explaining the situation may be enough to convince a lender of your creditworthiness.
To submit a consumer note to one of the bureaus, use the procedure described above for disputing anything on your report. Draft your statement, but keep it brief – the bureaus will print a maximum of 100 words – and send it in writing to the bureau. The bureau is required to send you an updated copy of your credit report with your consumer note added. Review the updated version to make sure everything is accurate and up to date.
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