Spotting Errors On Your Credit Report

What You Can Do About Them

Remember, credit bureaus are required by law to explain information in your credit report that you do not understand. The credit bureau that supplied the report is required to answer your questions by telephone. Call during off-peak hours for faster service.

Common Errors - And What to Do About Them

Credit reports often contain mistakes, which could hurt your credit rating and mean you'll pay higher interest rates, more points on a home mortgage or even be denied credit. While credit bureaus are legally responsible for reporting accurate information, you must bring any errors to their attention.

Common errors include:

• Accounts that are not yours
• Lawsuits or public actions in which you are not involved
• Incorrect account histories (saying you were late when you actually made payments on time)
• Incorrect name, address, phone number, or Social Security number
• Accounts listed as a "chargeoff" (debt that was written off and never paid) that you actually paid in full
• Accounts that were the responsibility of a divorced spouse

There is a big difference between incorrect information and negative information. As long as negative information is accurate, it will remain on your credit report. Beware of "credit repair" companies that make misleading promises to "clean up" credit reports or erase bad credit.

To remove incorrect information, you must send a letter to the credit bureau that clearly explains the error. Include photocopies of supporting documentation. Once the credit bureau receives your request, it has 30 days to investigate it and respond to you.

Here are some more tips for solving credit report problems:

• To contest a credit report, bill or credit denial, contact the appropriate company in writing and send it "return receipt requested."
• Keep all your original documents, especially receipts, sales slips, and billing statements. You will need them if you dispute a credit bill or report. Send copies only. It may take more than one letter to correct problems.
• Be skeptical of businesses that offer instant solutions to credit problems. There is nothing that a credit repair company can do for you - for a fee - that you cannot do for yourself for little or no cost.

If you can't resolve your credit problems yourself or if you need help, try a credit counseling service. Non-profit organizations in every state counsel consumers in debt. Counselors can arrange repayment plans that are acceptable to you and your creditors, and can help you set a realistic budget. Visit www.aiccca.org, the Web site of the Association of Independent Consumer Credit Counseling Agencies and www.nfcc.org, the Web site of the National Foundation for Credit Counseling, to find a reputable credit counseling organization.