The quality of your credit report affects many areas of your life. The amount of money you can borrow and the terms of the loans are directly dependent on your credit score. The better your credit report, the more freedom you have in choosing the best loan arrangements. Insurance companies and employers also rely on credit reports to determine your eligibility for work and coverage. Mistakes on a credit report can have drastic consequences, but are not difficult to fix.
Go to the Source
The easiest way to fix an error on your credit report is to visit or call the company that reported the late charge or judgment in the first place. Bring copies of receipts, or just talk to the accounting or billing department to find out why the charge was added. You may find that the company simply made a clerical error and can fix the problem with a letter to the credit reporting agencies stating its mistake. Or maybe you do owe the company a balance that you can pay and then get the report amended.
Order Free Credit Reports
If the company refuses to budge, the next step in repairing a mistake on your credit report is to obtain copies of the report from the three major credit reporting agencies. You are legally entitled to get a free copy of your credit report every year from Equifax, TransUnion and Experian. While you might find thousands of hits if you search for free credit reports online, there is only one place that guarantees not to charge anything for copies of those reports -- www.annualcreditreport.com. Carefully scrutinize the documents to ensure the error is not due to identity fraud, in which case there may be more than one mistake.
Write a Letter
Highlight the errors on your report and then compose a letter to each credit reporting agency that shows the mistake. In the letter, identify the errors by naming the source of the charge and the type of account. Describe why the entry is wrong and request that the mistake be corrected and the error removed from your credit report. The Federal Trade Commission makes this process easy by providing a sample letter on its website that you can just copy and fill in the particular blanks. Send a copy of the letter to the company that filed the error.
Back Up Your Claim
To make the whole process even easier, send copies of documentation that supports your claim, such as a receipt or a letter you wrote to close an account. By law, the credit reporting agencies, or CRAs, must investigate your claim within 30 days even if you can’t produce any evidence. As part of the investigation, they too will send letters to the claimants asking for proof of the debt. Once they receive answers from the creditors, they must correct your report and send you a letter about their findings. If they find the charge is valid and refuse to remove it, you can write another letter disputing the charge and have it attached to your credit report.
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