Why disputing your credit report can be difficult

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Why disputing your credit report can be difficult
2 years ago
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Notice a discrepancy on Your Free Annual Credit Report?

You've decided to take advantage of your free annual credit report available online from annual credit report dot com, a website which pools the reports of the three major credit rating agencies, also called credit bureaus: Experian, TransUnion and Equifax. You examine it and are surprised to note that your current employer is listed as the department store where you worked 15 years earlier and there are at least nine versions of the name you've had for 10 years (you didn't know there were so many ways to spell it, did you?). These definitely fall into the category of head-scratchers.

Then you notice that your score is lower than you expected, and upon further examination realize that the billing error of the hospital where you had surgery three years ago ??that had been resolved to your satisfaction ??has somehow been reported as a delinquent debt. Not only do you find that disconcerting, you also realize that because of your resulting mediocre credit score you've been bumped up to a higher interest rate on the mortgage that you applied for. Now what?

How to Dispute Errors on Your Credit Report
First, try to decide what information on your credit report may be harming your rating most. It's not likely that a misspelling of your first name or an old mailing address have had a negative effect, but that inaccurate representation of a delinquent debt probably does. To dispute information in your credit report, though, requires diligence on your part, both to minimize your aggravation and to help ensure a positive outcome. Careful preparation is critical to your cause.

You must contact the credit reporting agency who has published what you believe to be inaccurate information directly. (Although you can submit your dispute online, it may be advisable to do it in writing so you can send it by certified mail?”return receipt requested.) Some attorneys believe sending the same information to the supplier of the wrong information (in the example, the hospital billing department) is wise, because the credit reporting agency likely will not. Include your personal information (including social security number), account number of disputed charge, statement of what information you believe is incorrect, copies of any relevant documents, and a statement of what you want to be done. The Fair Credit Reporting Act requires that credit reporting agencies correct inaccuracies within 30 days.

Why the Process Can Be Messy
According to a study carried out by the Government Accounting Office which used information obtained from the Consumer Data Industry Association, the National Foundation for Credit Counseling and the Federal Trade Commission, assessing the frequency and impact of erroneous credit reporting is very difficult due to the limited information available. The existence of multiple reporters of public record data such as those that report on bankruptcies, liens and collections; inconsistent data collection among these reporters, which results in omission of important information having a positive effect on a credit rating, such as timely mortgage payments and credit card accounts in good standing and the inclusion of incorrect credit limits and account balances and reports of delinquent debt belonging to another party, all add up to a high rate of errors. On the other hand, credit reporting agencies maintain that once investigations are complete, most reported errors turn out to be misunderstandings on the part of the consumer. That in itself is an indication of the murkiness of the issue.

Will It Ever Get Any Easier?
Some believe that, as more consumers regularly obtain their free annual credit report and dispute questionable information, the incidence of errors and misunderstandings will decrease, because the trend may lead to more efficiencies on the part of the many reporters of information contained in public records; and because consumers keeping up with their credit reports will report smaller problems than they would had they not seen their credit report for the first time in 10 years. It may be a bit like visiting the dentist more frequently. After all, filling a few tiny cavities occasionally is less painful than having several teeth pulled any day.
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