H. L. Mencken once said that for every problem, there is a solution that is simple, neat, and wrong. Some might say that’s a good description of the credit report industry, where mistakes,unfortunately, are as common as f lies at a July 4th picnic.
When errors are made on your credit, you and you alone suffer the consequences. That’s why knowing your credit value and knowing what information is included on your credit report are two big first steps in smart debt management. Why? Because if you are aware of this information, you can eliminate any nasty surprises that might be in store for you. For example, you’re down at Gimbels or Marshall Field’s and you can’t wait to open up your new charge card. But when the clerk comes back, with what you swear is a smirk on her face, you know right away that you’re application for credit has been rejected. Nine times out of ten that means you weren’t aware of your credit score or weren’t aware of what was on your credit report. In other words, you didn’t have control over your debt management situation (of course, opening a department store charge card is another example of that).
Okay, so what happens if that situation does come to pass and you get rejected for credit? And you swear that you’ve paid your bills and you swear that your credit is clean? Could be that there is a mistake on your credit report—and you need to fix it.
If you don’t, the error stays on your credit report for seven years, for all to see. You don’t want that to happen.
Unfortunately, many Americans do. According to Consumer Reports magazine, 48 percent of Americans have mistakes on their credit reports, with 12 percent of those mistakes severe enough to restrict those consumers from getting credit. Consequently, it’s always best to check your credit report before you apply for a big loan or buy something on credit. That way you can correct any mistakes you find on your report before a lender or creditor notices.
In most cases, credit errors are caused by that most banal of reasons—your name. The more common it is, the higher the chance that you may share someone else’s financial faux pas—someone with the same name as you. Maybe that person dies, maybe that person stopped paying off his or her student loans, or maybe that person’s name wound up on your credit report through a transcription error. Most often, the name situation will come to manifest itself
on your credit report as an account that doesn’t belong to you.
To fix credit errors like that, make sure to check out all three credit report agencies. Do so at least once annually. One report agency may have different information than another so you have to cover all your bases.
When you identify an error, get cracking. By law, credit agencies are required to fix any errors. But don’t hold your breath, because they don’t always move as fast as you’d like. Or as fast as you need if you have a big mortgage loan waiting.
To get things going, file a dispute with the agency. You can call or e-mail, or even place a phone call (if you go that route make sure you jot down the name and title of the person you speak to).
Any written correspondence should include the following information:
• Your name, address, date of birth, and Social Security
• The name of the company you have a dispute with and any
relevant account numbers
• The reason for your dispute, any corrections to your personal
information, and a request for correction
Make sure that you collect all the paperwork you need to document your side of the story before you contact the credit agency.
Assume nothing and be prepared for anything and any question.
Make no mistake, the credit bureau will want solid proof that they have made a mistake.