The Fair Credit Reporting Act (FCRA) gives you the legal right to clean mistakes off your credit reports. This can be a powerful a tool for removing negative credit information. U.S. PIRG, a coalition of state public interest research groups, found mistakes in 25 percent of surveyed reports. You may be able to clean up your credit report by using the FCRA's dispute process if the errors are in negative entries.
Step 1
Assess your credit reports from TransUnion, Equifax and Experian to see how much negative information each report contains. The reports can be ordered free from annualcreditreport.com every year as allowed by the FCRA. Look for things like delinquent payments, collection accounts and charged-off items. Credit score provider FICO cites these as things that pull down your score.
Step 2
Review every negative item carefully for a mistake. Each bureau compiles its own information, so you may find an error on one report that does not show up on the others. Some errors, like incorrectly reported delinquencies, will be obvious. Others, like misspellings and transposed numbers, will require a closer look.
Step 3
Write a dispute letter to each individual credit bureau stating the errors you found in that report. Explain that you know your FCRA rights and want each allegation investigated within 30 days. State that you expect the items to be removed if the lenders cannot prove their accuracy.
Step 4
Send each letter via certified mail, asking the post office for a dated receipt. You will find the correct address for each bureau on the TransUnion, Experian and Equifax websites. The 30-day investigation period starts as soon as the letters are received.
Step 5
Track each response as you receive it. You should hear from all three bureaus within 30 days. They will tell you the results of their investigations and provide copies of your credit reports so you can see the changes. Lenders often don't bother to respond to inquiries. The challenged item has to be removed if there was no response.
Step 6
Add a consumer statement to your credit reports if the bureaus refuse to remove items that you truly believe are wrong because they claim the lenders have validated them. The statement lets you give your side of the story and will be provided when creditors get copies of your reports.
Tips and Warnings
- Each credit bureau has a dispute form on its website, and they often encourage consumers to use this electronic dispute process. The FTC advises consumers use written correspondence sent through the mail instead so you can save copies and track receipt of the letters through the post office.
Member Comments