Checking Your Credit Report
- Under federal law, you have the right to receive one free credit report each year from each of the major credit reporting agencies. Actually taking advantage of this right and checking your credit report at least once a year is crucial to ensuring the accuracy of your credit report. Your credit scores drop every time you miss a payment or add to your total debt. You may order your free credit report online, over the phone or by mail.
Disputing Errors on Your Report
- You may send a statement to a credit reporting agency if there is an error in your credit report. An error might include any inaccurate information, such as your outstanding balance or delinquency of payment. To dispute an error, send a letter to the reporting agency clearly explaining the nature of the error. Include copies of any documentation that supports your contention that the report is in error. Also send a letter to the entity that reported the erroneous information. Once the reporting agency receives your letter, it is required to investigate and remove erroneous information from your report. If the agency finds no error, however, nothing will be changed.
- If the investigation does not resolve the dispute in your favor, you can ask the reporting agency to keep in your file a copy of your statement disputing an item on your report. The fact that the item is disputed should be reflected in future reports. You can also request that any future potential creditor who requests a copy of your credit report receive a copy of your statement. In this way the potential creditor can evaluate for themselves how to weigh the disputed item.
- Negative items can appear on your credit report for up to seven years from the date of the incident. Items left disputed should eventually drop off your report after this period expires. You should monitor your credit report periodically, nevertheless, because it may be necessary to notify the reporting agency that the seven years has expired and remind it that an item should be removed. The major exception to the seven-year rule is bankruptcy, which appears on your record for 10 years.