Reviewing and Correcting Your Credit Report

When you receive your credit report, you must review it thoroughly. Check your personal details and then the financial details. To check them, you must have details of all the financial transactions made by you during the year. Also, compare the three reports that you have received from each of the bureaus. When you find any discrepancies or errors in any of your credit reports, you better initiate a dispute to correct the errors, without any delay.

How to Initiate a Dispute?

TIP – Keep copies of all your correspondence with the credit bureau

To initiate a dispute, you must send a letter in the prescribed form to the credit bureau via certified mail. This is done to have evidence of having disputed the error within the stipulated time for initiating a dispute. Write the list of disputes that you have and mail them to the concerned bureau/bureaus. If you have any documents as evidence in support of your claim, enclose copies of the relevant documents too.

When you initiate a dispute, the credit agency must contact you and investigate the case within 30 days. If you do not hear from them within 30 days, you can write to the bureau again in the prescribed form with a request for reinvestigation. Again wait for 30 days to hear from them, or if you have provided any additional information this time, you must for wait for 45 days. If your request goes unheard even after this, be sure to file a detailed complaint with relevant proofs of filing the request to the FTC.

Action of the Credit Bureau on Receiving Your Dispute

When the credit bureau receives your dispute, it has 30 days within which it must investigate the matter and submit the results of its investigation within 5 days. For the investigation, the bureau contacts the originating company, whose item you are disputing.

If your dispute is found to be correct or if it cannot be verified, then the item is removed from the credit report but if the item is found to be correct, it remains on your credit report for the stipulated time that depends on the nature of the financial transaction. It may range from a few months to 7-8 years.

If the disputed case ends in your favor, make sure to request a copy of your updated free credit report. A copy of the corrected report is also sent to all the financial institutions, lenders, creditors or employers who have requested your report in the last financial year.

Re-disputing an Error in the Credit Report

If the credit bureau believes that your dispute is not correct, the item is not removed from the credit report. However, there are ways in which you can still try to get the item removed. You must contact the originating company and write to them detailing the issue. If the originating company is convinced of your stand and accepts its mistake, you can demand the company to communicate right information to the bureau. If the credit company gives you a written correction, you can send it to the credit bureau for the report to be correct. If, however, the originating agency refuses to resolve the issue, you can seek help of a private credit repair agency and they can intervene on your behalf. If, despite all your efforts and evidences, there are no results, you can initiate a lawsuit and seek the judgment to end in your favor.

How to File a Complaint with FTC?

If the credit bureaus do not respond to your complaint within the stipulated period, you can lodge a complaint with the FTC, using their online form at their website:

https://www.ftccomplaintassistant.gov/

SUMMARIZING DISPUTING CREDIT REPORT ERRORS

Place your order for your credit report.
Review it for errors.
Note the errors in the report and compile the documented proof you have to support your claim.
Write to the credit bureau in the prescribed proforma, enclosed the documented proof.
Wait for the agency to revert.
Request reinvestigation after 30 days if you do not hear from them.
Wait for 30 days again, or for 45 days if you have included any additional information this time.
Contact FTC, if the agency still does not respond to your complaint.
When the error is corrected, request a copy of the corrected credit report for yourself and to be sent to the lending institutions, and creditors who have reviewed your credit report in the past financial year.

Initiating a Lawsuit

When the credit reporting agency does not remove the item from the credit report after it has been proved incorrect, you can initiate a lawsuit against it.

You can sue the originating agency for making an incorrect report to the bureau or for being negligent in their duty in getting the item removed. You can claim the expenses incurred due to the lawsuit and other losses due to the error in the report.

You can sue the Credit Reporting Agency for non-removal of an item, which has been proved to be inaccurate.

You can sue the Credit Reporting Agency when it refuses to disclose credit information to you or provides false information about you.

You can sue the Credit Reporting Agency if any unauthorized person has been permitted to view your credit report.

You can sue the originating company, which fails to correct errors in your bills.

Check Credit Card Bills

It is essential for the consumer to keep copies of his credit card bills and review them as soon as it is received. When you find an error in the bill, you must take steps to rectify the error so that the mistake is corrected before it is reported to the credit bureau. Write a letter to the credit card company informing them of the error. You must do so within sixty days of receipt of the bill. The company has to respond to your complaint within 30 days of receipt of the letter and must resolve the issue within 2 billing cycles.

You have the right to withhold payment for the disputed item, under certain conditions that are given below:

If the dispute is for over $50;
If the store from which it was purchased is located in your state or it lies within one hundred miles of your residence.

When you report the error to the credit card company on time, the unpaid item cannot be report to the bureau as delinquent as the disputing matter is in progress.

Check Other Bills

TIP – When you are sending a letter to the originating company to dispute errors on the bills, send them to the correspondence address and not to the billing address.

As with credit cards, check other bills too when you receive them and ensure that there are no errors. In case there are, like being charged double for the same item or being charged extra for goods that you have not purchased, you can call up the originating company and get the error rectified. Always produce documents in proof of your claim to speed up the process of rectification.

Building a positive credit report

If you have opened accounts to repay bad credit, check that the accounts have been included in the credit report. If they have not been included then you can write a letter to the bureau requesting them for the same. The bureau will charge a fee for this. You can also request the creditor to report the opening of new accounts to the bureau.

Apart from this, you can request the bureau for inclusion and updating of information, like your address, investments, employment et al, when you are trying to build a positive credit report. Enclosing documents in support of your claims of accounts etcetera will help the bureau verify them and add them to the credit report.

How to Remove Collection Accounts?

Unpaid and disputed bills are often sent to collection agencies for payment of the bills. These appear in the credit report as collection accounts and they lower the credit score. To remove them from the credit report, you can follow a few steps.

Settle directly with the creditor – You can settle the debt directly with the creditor to whom you owe money and ask them to report the payment to the credit bureau and get it removed from the credit report.
Debt Validation - You can ask the collection agency to prove that you owe him the debt. If it is unable to do so, then the collection agency cannot collect the debt from you or report it to the credit bureaus.
Debt Settlement – You can settle the debt with the collection agency in full and in return request them to report it to the credit bureau and get the collection account removed from the credit report.

Debt Validation

When bills are unpaid or are disputed, they are sent to a collection agency, which then begins to call the consumer for payment of the bills. You can use your rights under the FDCPA (Fair Debt Collection Practices ACT) and inform the collection agency to stop calling you and that you will settle the debt only with the original collector. Under the law, if he cannot prove that he is the owner of the debt, he cannot collect the debt or is allowed to contact you regarding the debt or report it to the CRA. This is known as Debt Validation.

How to Remove Inquiries?

When you check your credit report, check the inquiries section to see how many people requested for your credit report. A third party cannot view your credit report, unless you have authorized them. If you find that there are entries of companies, whom you did not authorize, but who viewed your report, then you can contact them and request them to get the inquiries removed.

100-Word Statement

When you have been through financial difficulties or have had medical exigencies because of which you have been unable to pay bills, you can write a 100-word personal statement to be included in your credit report citing reasons for your bad credit. The credit bureau may or may not include it in your report. It is solely a matter of discretion by the bureaus. The credit reports provided by Experian and TransUnion have this facility.

Consumer Rights under Fair Credit Reporting Act

The consumer has certain rights under the Fair Credit Reporting Act, which he or she can exercise with regard to the credit report and the disputes.

You are entitled to receive a free annual credit report from each of the three credit bureaus, Experian, Equifax and TransUnion, once in a year if you request for it.
You are also entitled to get a free copy of your credit report, if,
You are denied credit, employment or insurance;
You are unemployed and propose to apply for a job with 60 days;
You are on welfare; and
An inaccuracy in your report has been rectified.
The credit bureaus must provide you complete information about your report and also the sources of the information, if you request for it.
No one can see your credit report without your authorization.
The credit bureaus must comply with the law and investigate any dispute initiated by you within 30 days.

Keep Copies of Your Correspondence

Whenever you contact any of the credit agencies or the originating companies regarding complaints or errors, keep records of all the calls made and copies of the correspondence made and received. When you do so, it will be easy for you to follow up your complaints/claims with the credit bureaus and the origination companies.