“Dear CatholicPF … I recently read your post “Understanding your Credit Score” … great post. Anyways it got me motivated to request a copy of my credit report from Experian. I’m in my late 30′s and honestly can’t remember the last time I actually reviewed my own credit report …Long story short, I was totally shocked to find a number of errors in my credit report – everything from incorrect balances, to old accounts that were listed as open, and even an account that didn’t belong to me! …It made me wonder how many times I had applied for credit (mortgage, car, etc) over the last decade and lenders were possibly being given an inaccurate look at my financial history by the credit bureaus! Anyway, how do you recommend I go about getting these mistakes corrected? Thanks for the help!” – Lindsey
The excerpt above is part of an email I received over the weekend from a visitor to CatholicPF and sadly, Lindsey’s situation is far too common. Given the passive approach most of us take when it comes to monitoring not only our credit score, but the content of our actual credit reports, it is not surprising that the three credit bureaus routinely include errors and inaccuracies in our credit reports.
In fact -
Forty percent of Americans have never obtained their score, according to a survey commissioned by the Consumer Federation of America and Washington Mutual. That means a lot of consumers don’t know anything about the number that affects their ability to get a mortgage, a low interest rate on a credit card, and even a job. – US News & World Report
Given the fact that a significant portion of the country (even 40% seems optimistic) has never obtained a credit score, I again suspect that an even higher percentage of us have never gone as far as actually reviewing our credit reports from each of the three credit agencies: Experian, Equifax, and TransUnion.
All that said, here are the steps that I would recommend Lindsey take in order to correct the errors in her credit report.
1. Obtain a copy of her credit report from each of the three agencies. The reason for this is to check the accuracy of each of the three bureau reports (and no, they are not all necessarily going to report the same information). Review each of your three reports thoroughly checking for accuracy in: account balances, credit limits, payment history, timeframe associated with each account, closed/open status, etc. Highlight any error (even if you considered it minor) that you find in the reports.
2. Send letters to all three agencies (if applicable) addressing each error and include a copy of the portion(s) of the report(s) containing the errors. Your letter(s) need to be very specific and should reference the account, account number, the error in question, the correction of the error as you would like to see it, and any supporting documentation to support your claim that the agency report contains an error. Additionally, you will want to send a similar letter to the actual account in question (the Citibank Credit Bureau Dispute Department, the customer relations department for your Auto financing, etc). The reason for writing two letters is that you will address the problem from both ends: the misinformation in your report could be the result of a mistake on either the credit agency’s end or a mistake on the part of one of your lenders. I have found if you want to resolve errors on your credit report quickly, it is important to be proactive and reach out to both the agency and account in question. And keep in mind, the three agencies must respond to your letter with thirty (30) days!
3. Here are the addresses for each of the credit agencies (you of course will need to look up similar information when sending a letter to the lender/account in question). Each of the agencies provides consumers with an opportunity to submit credit report disputes online as well (and while I prefer resolving issues via standard mail, I have include appropriate url’s for each of the credit bureaus.
Equifax Credit Information Services, Inc
P.O. Box 740241
Atlanta, GA 30374
475 Anton Blvd.
Costa Mesa, CA 92626
TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000
4. Use a standard, professional looking form letter when writing to either the credit agencies or lending institutions.
Sample Dispute Letter
Your Address, City, State, Zip Code
Name of Company
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.
This item (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.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (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 and court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Enclosures: (List what you are enclosing.)
I want to thank Lindsey for her question and I commend her for being proactive. As she correctly suggested, errors in your credit report can be costly and will add up to real dollars and cents in the form of higher interest rates and less attractive lending options. As I hope this post and Linsey’s question have demonstrated, it is not enough to simply know what your credit score is – you must also be aware of what Equifax, Experian and Transunion are using to calculate that score. And it is this information, contained in your actual credit report, that should reviewed by consumers on a regular basis (I recommend bi-annually and/or before any major purchase – home, car, etc).
As consumers we have a responsibility to be proactive in caring for our financial well being and like it or not, your credit score and your credit report are an important reflection of your overall finanacial health. Just as your annual healthcare exam 1) confirms that what you’re doing is working (diet, exercise, etc) and 2) can detect small issues (high cholesterol) before they become big issues (heart attacks), so too a regular review of your credit reports from Experian, Equifax, and TransUnion. Ensuring these reports are correct and free from inaccuracies confirms that what you are doing financially (hopefully making payments on time, keeping your credit card balances at zero, etc) is working and allows for early detection of potential financial problems before they become more difficult to remedy and adversely affect your overall financial health.
And now I’ll leave you with a little bit of insight courtesy of the Bible. The following is a passage I find as applicable when discussing Credit Reports as I do when considering life’s other challenges -
A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks, and suffers the consequences.