Reviewing Your Credit Report Yearly

It is critical that you periodically review your credit report for inaccuracies or omissions, especially if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of credit card and other financial information in your credit file could speed the credit-granting process.

If you've been denied credit, insurance, or employment because of information supplied by a CRA, the FCRA says the company you applied to must give you the CRA's name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year if you certify in writing that (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you up to $9.00 for a copy of your report.

You can request a copy of your credit report by simply calling a credit bureau. The three national credit bureaus are:

• Equifax
  P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111
• Experian (formerly TRW)
  P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742)
• TransUnion
  P.O. Box 1000, Chester, PA 19022; (800) 916-8800

Under the FCRA, both the CRA and the organization that provided the information, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the CRA and the information provider.

First, tell the CRA in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position and all pertinent information. Enclose a copy of your report with the items in question circled. Send your letter by certified mail, return receipt requested, so you can document what the CRA received. Keep copies of your dispute letter.

CRAs must reinvestigate the items in question unless they consider your dispute frivolous. Disputed information that cannot be verified must be deleted from your file. If your report contains erroneous information, the CRA must correct it. If an item is incomplete, the CRA must complete it. If your file shows an account that belongs to another person, the CRA must delete it. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change.

Upon request, the CRA must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes.

Second, tell the creditor or other information provider in writing that you dispute an item. When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information will stay on your report for seven years, but there are exceptions:

• Information about criminal convictions may be reported without any time limitation.
• Bankruptcy information may be reported for 10 years.
• Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.
• Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.
• Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.
• Criminal convictions can be reported without any time limit.

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs. If you've been told you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the CRA to add this information to future reports. You should, note that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file.

Below is a sample letter that could be used to dispute an inaccurate credit report.

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Date

Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Credit Reporting Agency
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received.

(Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

---------------------------------------------------------------

Taking care of credit history will help you protect not only your future buying power, but will ensure you are not a victim of credit fraud or identity left. If you have questions about how this can affect your specific financial situation, contact your accountant of financial advisor.

Credit Reporting Q&A

If you've ever applied for a credit card, charge account, a personal loan, insurance, or a job, there's a file about you. What’s in this file? This file is called a credit report, and it has information about where you work and live, how you pay your bills (especially revolving credit cards), and whether you've been sued, arrested, or filed for bankruptcy.

There are companies called credit reporting agencies (CRAs) that compile this information and sell it. What they do is give companies information about you to gauge your creditworthiness. They give this information about you to creditors, employers, insurers, and other businesses. You probably know the CRAs known as credit bureaus. The three most common ones are Equifax, Trans Union, and Experian.

The Fair Credit Reporting Act (FCRA) is designed to promote accuracy and ensure the privacy of the information used in consumer reports. It is enforced by the Federal Trade Commission.

Below are some commonly asked questions and answers about consumer reports and CRAs:

Q. How do I find the CRA that has my report?
A. Look in the yellow pages under "credit" or "credit rating and reporting." The three major national credit bureaus are:

Equifax
800-685-1111
www.equifax.com

Experian
888-EXPERIAN (888-397-3742)
www.experian.com

Trans Union
800-916-8800
www.transunion.com

If you are ever denied credit, the one who denied you has to tell you which agency they got your information from. You are then able to receive a free copy from that bureau.

Q. Do I have a right to know what's in my report?
A. Yes. But you have to ask for it. They will tell you everything that is in your report.

Q. Is there a charge for my report?
A. Sometimes. If you just want to look at your credit report, then you have to pay for it. But if you are denied for credit, insurance or employment, and you request your report within 60 days, it is free. Fees vary from agency to agency.

Q. What can I do about inaccurate or incomplete information?
A. Under the Fair Credit Reporting Act, there is a process you must follow when disputing information.

• Tell the CRA in writing that you dispute the information. Provide any supporting documentation that you might have.
• The agency will investigate. It usually takes 30 days for this.
• Then the CRA will give you written notice of the results and a free credit report.
• If the information was inaccurate, it will be taken off your credit report.

Q. But what if the CRA says the incorrect information is accurate?
A. A reinvestigation is not always going to solve your credit issue. If the creditor says the information is correct, most likely the CRA will believe them. The best you can do is:

• Ask the CRA to file a statement that you dispute the charge
• Contact your creditor directly and resolve the issue with them first, and then ask the CRA for another investigation.

Under the Fair Credit Reporting Act if you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a CRA.

Q. Can my employer get my report?
A. Only if you approve.

Q. Can creditors, employers, or insurers get a report that contains medical information about me?
A. Not without your approval.

Q. How long can a CRA report negative information?
A. 7 years, with the following exceptions:

• Criminal convictions have no time limit
• Bankruptcy is for 10 years
• No time limit on a job application for a $75,000 or more job
• No time limit on insurance application of more than $150,000
• Unpaid judgments are either for 7 years or when the statute of limitations runs out, whichever is longer.

Q. Can anyone get a copy of my report?
A. No. Only those that the FCRA deems has a legitimate need can get it. For example, an insurance company when you apply for insurance can get it, but not a chicken restaurant when you buy a meal deal with 10 pieces or more.

Q. Can I stop a CRA from including me on lists for unsolicited credit and insurance offers?
A. Yes. Creditors and insurers may use information from your credit report to send you unsolicited offers. But these offers have to have a toll-free number that you can call to get your name removed from their lists.

Q. Do I have the right to sue for damages?
A. You bet you can. You may sue a CRA in state or federal court for most violations of the FCRA. If you win, the defendant will have to pay damages and reimburse you for attorney fees. But it must be for a violation of the Fair Credit Reporting Act, not because of inaccurate information.

Q. Are there other laws I should know about?
A. Yes. If your credit application was denied, the Equal Credit Opportunity Act requires creditors to specify why. But you have to ask. . For example, if you were denied because you have a short credit history, then they have to tell you that. “Just because” won’t cut it.

Q. Where should I report violations of the law?
A. Since the Fair Credit Reporting Act is enforced by the FTC, you can send them information about your experiences and concerns as it related to the Fair Credit Reporting Act. Send your questions or complaints to: Consumer Response Center - FCRA, Federal Trade Commission, Washington, DC 20580.

What is a Credit Report?

You’ve heard other people talk about it, and you know it is important. But, what is a credit report? Put simply, your credit report is what lenders look at when deciding whether or not to approve you for a new credit card or other loan application. A good credit report can get you better credit card APRs or car loan rates. On the other hand, a bad credit report can also cause you a lot of problems.

There are three major credit agencies: Equifax, Experian, and TransUnion. These agencies, or "credit bureaus," collect and report information about your financial habits and put this information into a credit report. Your credit report typically includes:

• Your name
• Your Social Security number
• Your current and previous addresses
• Information about your current and past loans
• Your public record information (bankruptcies, court judgments, liens)
• A list of companies that have reviewed your credit

Your credit report demonstrates to potential lenders how you handle debt and helps them to determine whether or not you are a good candidate to lend money to. That is why it is important to look at your credit report once a year. This way, if there are any mistakes or problems, you can resolve them with the credit bureau before applying for a new loan.

You can visit any of the three aforementioned credit agencies’ Websites to purchase a copy of your credit report.

How to Dispute Credit Report Errors

Credit Report Basics

Your credit report contains information about where you work and live and how you pay your bills (especially credit card bills). It also may show whether you've been sued or arrested or have filed for bankruptcy. Companies called consumer reporting agencies (CRAs) or credit bureaus compile and sell your credit report to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate.

Some financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process.

Getting Your Credit Report

If you've been denied credit, insurance, or employment because of information supplied by a CRA, the FCRA says the company you applied to must give you the CRA's name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year if you certify in writing that (1) you're unemployed and plan to look for a job within 60 days, (2) you're on welfare, or (3) your report is inaccurate because of fraud. Otherwise, a CRA may charge you up to $9.00 for a copy of your report.

If you simply want a copy of your report, call the CRAs listed in the Yellow Pages under "credit" or "credit rating and reporting." Call each credit bureau listed since more than one agency may have a file on you, some with different information. The three major national credit bureaus are:

Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.

Experian , P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).

Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.

Correcting Credit Report Errors

Under the FCRA, both the CRA and the organization that provided the information to the CRA, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the CRA and the information provider.

First, tell the CRA in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the sample below. Send your letter by certified mail, return receipt requested, so you can document what the CRA received. Keep copies of your dispute letter and enclosures.

CRAs must reinvestigate the items in question--usually within 30 days--unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. l Disputed information that cannot be verified must be deleted from your file.

If your report contains erroneous information, the CRA must correct it.

If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the CRA must show that you're current. If your file shows an account that belongs only to another person, the CRA must delete it. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the provider.

Also, if you request, the CRA must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the CRA, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any CRA, it must include a notice of your dispute. In addition, if you are correct-that is, if the disputed information is not accurate-the information provider may not use it again. Accurate Negative Information When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years. There are certain exceptions:

Information about criminal convictions may be reported without any time limitation. Bankruptcy information may be reported for 10 years. Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit. Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.

Adding Accounts to Your File

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't. If you've been told you were denied credit because of an "insufficient credit file" or no credit file" and you have accounts with creditors that don't appear in your credit file, ask the CRA to add this information to future reports. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file.

Sample Credit Dispute Letter

Following is a sample letter that could be used to dispute a an inaccurate credit report.

Date

Your Name

Your Address

Your City, State, Zip Code

Complaint Department

Name of Credit Reporting Agency

Address City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received.(Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)

This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

How Errors on Your Credit Report Get Fixed

In looking over your credit report, perhaps you noticed some mistakes. Like any good consumer, you decide it is important to get these errors corrected, so you use the instructions contained in the report on how to dispute any mistakes. This often simply means filling out a "research request" asking the credit agency to investigate the error and correct it. But what happens next?

Once it leaves your hands, credit bureaus must investigate your concerns -- often within 30 days -- unless they regard your dispute as frivolous. Additionally, the credit reporting agency must pass along all relevant information you provide about the dispute to the creditor or lender, also known as the information provider.

When the information provider receives notice of a dispute from the credit reporting agency, it must investigate and review all related information supplied by the agency. Then, the information provider has to report the results back to the agency. If the dispute error is verified, the agency is required to inform other agencies of that resolution under the provisions of the Fair Credit Reporting Act.

If the disputed information cannot be confirmed, it must be removed from your file. The credit reporting agency must fix any incorrect information in your credit report.

Also, the agency must complete any unfinished items. For example, if your credit report indicated that you were late making credit card payments, but did not show you were no longer delinquent, the agency has to specify that your account is now current.

If your credit report shows an account that only belongs to another person, the agency must remove it.

The process of re-investigating your credit report can be lengthy, but once it is complete, the credit reporting agency must provide you with the written results as well as a free copy of your credit report if the dispute results in an alteration to it. Experts recommend that consumers begin following up with credit bureaus and the creditors in question if it has been over 60 days since they began the dispute process.

Consumers should review their credit report at a minimum every two years, since there is a two-year limit on the credit bureau's liability for a mistake from the time that error is introduced into your credit report. There is some room for debate regarding when the two-year limits begins, either when inaccurate information is first filed or when the reporting agency releases a report with the wrong information. Regardless, it is a good idea to keep yourself informed of what your credit report shows and to take action to get any mistakes corrected.