Credit bureaus have been likened to the wizard behind the green curtain due to the mysteries surrounding how information is reported and how they develop your credit score. I wanted to inform you on how you can help your score by removing inaccuracies from your report. Be sure to take a look at the FTC link below and save it to your favorites for future use. Contact us at 877-343-3289 if you would like help with pulling a credit report.
Everyone who has borrowed and repaid a loan, credit card account or other debt has a credit history. These credit histories are reported on credit reports, which are managed by the credit bureaus. For many reasons, it is important to monitor your credit report at least once per year to be sure it is accurate.
If you find errors on your credit report, you have the right to dispute those errors, and a new set of rules impacting the way consumers file credit report disputes will go into effect July 1. The new rules, part of the Credit CARD Act of 2009, affect Section 312 of the FACT (Fair and Accurate Credit Transaction) Act. While they generally impact internal regulations and guidelines at financial companies that report information about borrowers to the credit bureau, here is what consumers need to know:
1) File a dispute letter with the credit reporting agencies
The federal Fair Credit Reporting Act requires credit bureaus to provide a procedure for consumers to dispute inaccurate data on their credit reports. The easiest way to file a dispute letter is online. Each of the three credit reporting agencies (Equifax, Experian or TransUnion) offers guidelines on its website. The Federal Trade Commission also offers a free guide to disputing credit report errors at www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm.
2) Dispute issues directly with creditors
Previously, if a consumer disputed an item with one of the three major credit reporting agencies, the bureau notified the creditor that the item was being disputed. The creditor then had 30 to 45 days in which to respond to that dispute. The new rules also allow consumers to dispute errors directly with the relevant creditor or other “furnisher” of information to the credit bureau, including debt collectors. Time limitations remain the same. The “furnisher” must conduct a “reasonable investigation” of the dispute, unless the dispute is frivolous or irrelevant. Examples of a frivolous dispute might be when the dispute was previously resolved, with no new information provided, or when a consumer provides insufficient information.
3) Confirm whether the item stays or goes
If the creditor provides substantial evidence that the item is valid, the listing will remain on the report. If the creditor cannot substantiate the item, the credit bureau must remove it.
4) Items might return if creditors provide evidence
If the creditor does not respond to the dispute within 30 to 45 days, the credit bureau must remove that listing from the consumer’s credit file. However, even after an item has been removed, if the credit bureau receives information from the creditor substantiating the listing, the credit bureau can replace the item on the consumer’s credit report.
5) File a complaint for serious violations
If a credit reporting agency refuses to remove a listing that is truly invalid, even after the consumer has provided substantial evidence, the consumer can file complaints with the Federal Trade Commission, and with his or her state’s Attorney General’s office. Legal action is an option that consumers would need to discuss with an attorney.
6) Check reports again each year
Occasionally, a debt reappears even after a consumer has successfully disputed it and had it removed. This may happen if a debt is sent to a collection agency that begins reporting the item to the bureaus again. In that case, the consumer must dispute the item all over again.
By law, Americans have the right to receive a free copy of their credit report each year by calling 877-322-8228 or visiting www.annualcreditreport.com.
Article written by Andrew Housser
If you need help with this, call our firm at 877-343-3289 or fill out the contact form HERE.
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