Transunion. Experian. Equifax. The power that these three companies have over your financial life is staggering. Your credit score impacts everything from whether you can own a home, buy a car, rent an apartment or even get a job. Your credit report and the corresponding score is another area where understanding the process and the various rights provided to you by the law will ensure that decisions made about you are made on sound and accurate information.
Your Right to Have a Copy of Your Credit Report
This seems like it would be a given. With so many financial decisions based upon your credit report it would seem only fair that you would be entitled to a copy of it. However, you need to remember that the Big Three (Transunion, Experian, Equifax) are private companies – not governmental agencies. Private companies typically don’t have to give you anything.
But because so much rides on the accuracy of your credit report the federal government enacted a law that provides you as a consumer with certain rights. This law is called the Fair Credit Reporting Act (FCRA). The first of these is your right to get a copy of your report without having to pay for it.
Obtaining Your Free Credit Report
There are several instances where you are entitled to obtain a free credit report. The first of these under the FCRA provides that you can get a copy of your credit report for no charge once every twelve months. (15 U.S.C. § 1681j(a)(1)(A)). The easiest way for your to get a copy of your report is by going to the website www.annnualcreditreport.com. Through this website you can immediately obtain a copy of your credit report from each of the Big Three credit bureaus. You can also access your credit report over the phone by calling 1-877-322-8228. The credit bureau is required to send you a copy of your report within 15 days of you ordering it. (15 U.S.C. § 1681j(a)(2)).
You can order all three at once to compare the information each credit bureau has on you or you can order them one at a time staggered throughout the year to monitor new information on your report. To be clear, you are entitled to one credit report from each credit bureau every twelve months.
Where is My Score?
The first thing most people notice is that your free credit report does not have your credit score on it. You are not entitled to view your credit score for free. (15 U.S.C. § 1681g(a)(1)(B)). For that you must pay the credit bureau and will be given an opportunity to purchase your credit score through the www.annualcreditreport.com website.
Other Times When You Can Get a Free Credit Report
In addition to the one free annual credit report you are entitled to get a copy of your report if you have reported possible fraud or identity theft associated with your financial accounts. Further, if you have applied for credit and been turned down, not only is the lender required to inform you of why you were turned down but you have 60 days to request a copy of your credit report for no charge. (15 U.S.C. § 1681j(b)).
You Have Your Report. Now What?
Now that you have your credit report, what are you going to do with it? Lenders will make their decisions about you based upon what is in your credit report. It is vital that you make sure that the information on your credit report is accurate. The Big Three credit bureaus process approximately 4.5 billion pieces of information on a monthly basis. With volume like this you might expect there to be the occasional mistake.
In fact, a Study by the U.S. Public Interest Research Group found that 79% of consumer credit reports contained errors, including 25% that contained errors so substantial that it could result in you being denied credit!
In reviewing your credit report you need to look at the personal information (i.e. address, spelling of your name), your accounts, and the public information section. At times consumers will encounter mis-merged information – where information from one person is reported on another person’s credit report.
Or the accounts listed on your report don’t contain accurate information. The payment history may contain outdated or incomplete items or items that are simply inaccurate. So what do you do if you are one of the 79% that has an inaccuracy on your report?
How to Dispute Items on Your Credit Report
The Big Three credit bureaus allow you to dispute the information on your report through mail, phone, or over the internet. While disputing information on your report through the mail seems antiquated it does have some advantages over disputing information over the phone or internet.
Telephone and interest disputes do not create an adequate record and make it difficult to follow up if you must resort to litigation to correct your report. Submitting a written dispute will provide you with a clear record and allow you to provide a detailed explanation of what your dispute is rather than a “check the box” reason that is provided for on the internet.
In writing to the credit bureau make sure to include:
- Full name
- Current address
- Telephone number
- Social Security Number
- Name of your spouse
- Current employment information
- A copy of your report with the information you are disputing circled.
- A clear description of why you are disputing this information.
- A request that the credit bureau delete or correct the information.
Along with your written dispute you should include copies of any documents you believe supports your request.
Once the credit bureau receives your dispute they have thirty (30) days to investigate it (45 days if you are disputing information you received after requesting your annual free credit report). The thirty days begins to run from the time the credit bureau receives notice of the dispute.
If the credit bureau’s investigation finds that the information you disputed is inaccurate or that it cannot be verified it is required to delete the information or modify it so that it is reported accurately.
Why Not Dispute Everything?
You may have read online from various credit repair shops that a good way to clean up your credit is to simply dispute everything in hopes that the original lender won’t verify the debt thus forcing the credit bureaus to remove it from your report.
The FCRA addresses these types of frivolous disputes by allowing the credit bureaus to refuse to investigate a dispute if they believe it is frivolous. Certain triggers are the receipt of letters disputing all of the information on your report or disputes received from third parties such as a credit repair company.
In the past such a tactic may have worked but with the current automatic system such a method is no likely to produce any positive results.