3. Explain the Factors that Affect Creditworthiness and the Purpose of Credit Records
e. How to Correct Errors
Your credit reports should be accurate, but it is important to make sure. If there are errors or outdated information on your credit report
, it could hurt your chances of getting a new loan or cause you to be charged higher interest rates.
The good news is that you have the right to have the mistakes corrected at no charge to you. The only people who can add and remove information from the reports themselves are the credit bureaus. This request can be initiated by the creditor that posted the info or by a consumer
in the action of filing a dispute. Here’s how:
Follow the instructions you get with the credit report to tell the credit-reporting agency about the mistake (with a phone call or the dispute-resolution form provided). The form is usually better because you’ll have a copy and the credit- reporting agency must investigate your complaint within 30 days and get back to you with its results. You may also tell them about mistakes on-line at their websites. They will check with the creditor and if the information is inaccurate, report the changes to the other credit reporting agencies.
If additional information is needed to correct the error, the credit-reporting agency will tell you what to send. For example, the agency may ask for copies of canceled checks or other payment information. If you have kept good records of this information, it will be much easier to show where a mistake occurred.
If the credit-reporting agency does not find an error and you still believe your report is not accurate, contact the creditor directly to try to resolve the problem. When you resolved the dispute, ask the creditor to send a correction to the credit-reporting agency.
You also have the right to explain your side of the story if the issue remains unresolved. You may write up to 100 words to explain the situation. The statement will appear on your credit report. For example, if you did not pay a car repair bill because the mechanic did not fix the problem, the unpaid bill may show up on your credit report—but so will your explanation.
Remember that credit reports are actually your friend—If you take care to protect your credit.
By giving lenders a fast, objective measurement of your credit risk, a high credit score allows you to get credit quickly at lower rates.