Equifax, Experian and TransUnion are the three credit reporting agencies and they have a great deal of power over your financial life. They collect information about you, including demographics, employment information, credit account balances, payment history and even certain kinds of legal judgments. They sell reports to creditors, employers and insurance companies where it is used to make decisions about you. Fortunately a law called the Fair Credit Reporting Act (FCRA) allows you to monitor your reports and gives you certain other rights you can use to deal with the agencies.
Step 1
Ask which reporting agency was used when a company denies your credit, insurance or employment application due to information contained in your credit report. They must give you this information under the FCRA.
Step 2
Request a copy of your credit report from the agency whose report was used to make a negative decision about you. You are entitled to a free copy whenever you are turned down so you can check for errors that might have wrongly affected your credit rating.
Step 3
Write and mail a dispute letter to the agency if you find any errors. Circle the mistakes on your report and enclose a copy. All three agencies have dispute forms on their websites, but the Federal Trade Commission (FTC) advises sending a certified letter instead to get proof of receipt.
Step 4
Recheck your credit reports to ensure the credit reporting agencies have followed through with their promises to correct the errors. You are entitled to free copies for this purpose, the FTC says. Send a follow-up letter if you still see an item that was supposed to have been removed.
Step 5
Ask the credit reporting agency to send a new copy of your report to any company that reviewed it as part of a credit or insurance application within the past six months, the FTC recommends. The agency must go back two years if companies got your report for employment purposes.
Tips and Warnings
- Credit reporting agencies are subject to time limits for reporting most negative information. They must remove most items at the end of seven years, although some bankruptcies can be reporting for ten years and tax liens can stay on your reports forever if you do not pay them. You can dispute outdated items that are still showing up in the same way as you report errors. Creditreporting.com states you can sue the credit reporting agencies if they violate the FCRA. Your case can be filed in state or federal court. The law spells out the exact stipulations for a suit.
- Forbid the credit reporting agencies from selling your information to banks and other solicitors by filling out a form at optoutprescreen.com or calling the phone number on the site. The agencies run this website to allow consumers to opt out of pre-approved credit and insurance offers in a simple way.
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