Remove Reporting Errors To Increase Credit ScoreConsumers have the right to dispute and fix credit reporting errors. Doing so can improve credit scores and increase an individual's buying power.
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Credit reporting errors occur when a creditor reports incorrect information to the credit bureaus. Errors can be minor, such as an incorrect address, and not impact credit scores at all. Some mistakes, however, can have serious credit consequences. These errors include missed payment errors, incorrect balance reporting and false collection accounts. Regularly checking credit reports is the first step every individual can take toward correcting errors and improving credit scores.
Check Each Credit Bureau’s Report for Errors
One common mistake that many individuals make when reviewing their credit reports for errors is to pull a tri-bureau credit report. Tri-bureau credit reports combine data from Experian, Equifax and TransUnion into one financial profile. Although tri-bureau reports can help lenders to gather all available credit information on a consumer in one report, they aren’t ideal for individuals scrutinizing their credit files for errors.
The credit bureaus do not provide information to one another concerning consumer accounts. Because of this, a consumer’s credit history may vary depending upon which credit report he pulls. If mistakes are present within a tri-bureau report, an individual may have no way of knowing which credit bureau is currently reporting the account in error- making disputing the inaccuracy more difficult.
The Fair and Accurate Credit Transactions Act (FACTA) was passed in 2003 as an amendment to the Fair Credit Reporting Act (FCRA). FACTA allows each individual to pull one free copy of his credit report each year from each of the credit bureaus. Thus, an individual can annually access and examine all of his credit files free of charge.
See :Learn How to Read a Credit Report
Notify Creditors of Reporting Errors
Although the credit bureaus maintain consumer credit reports, they don’t actively control the information that appears within each individual’s credit profile. This job falls to creditors. If mistakes appear within a consumer’s credit file, this is because of an error on the part of the creditor- not the credit bureau.
See :How Companies Report to the Credit Bureaus
Individuals hoping to remedy credit reporting errors can contact the creditors that are reporting incorrect information and request an immediate correction. It helps if a consumer possesses supporting documentation to prove his claim that the entry in question is being reported incorrectly.
Dispute Errors With the Credit Bureaus
If an individual’s creditor won’t work with him to remedy mistakes, he has the option to dispute the flaw in his credit report with each credit bureau whose files reflect the inaccuracy.
Disputing is the process by which an individual states that information in his credit report is incorrect and requests an investigation. All three credit bureaus accept disputes online, via telephone and through the mail.
The FCRA requires that each credit bureau conduct an investigation of every legitimate dispute it receives. Regardless of whether the information is verified or removed, a consumer who files a credit dispute can expect a written response from the credit bureau regarding the results of its investigation within 30 days.
see :The Fair Credit Reporting Act
How Credit Bureau Investigations Work
The sheer volume of consumer disputes that the credit bureaus receive on a daily basis make thorough investigations impossible. Thus, the most common investigation method the credit bureaus use is to contact the information provider and ask if the notation within the consumer’s credit file is correct. This is most frequently done via fax. If the creditor does not respond to the query, or responds that the information is incorrect, the credit bureaus will remove the offending tradeline from the individual’s credit report and notify him of the change.
FCRA Lawsuits Can Help Clear Up Reporting Errors
In some cases, creditors verify incorrect information with the credit bureaus. All creditors are bound by the FCRA to provide only information they know to be true and accurate. If an individual has notified a creditor of the inaccuracy of its report to the credit bureaus and provided documentation to this effect, yet the creditor continues to report the error, it is in clear violation of FCRA guidelines.
All individuals have the right to sue their creditors for FCRA violations. Should an individual file a lawsuit, his creditor is likely to immediately request the removal of the error from his credit report since doing so costs the company much less than sending an attorney to the consumer’s area for a legal battle.
Although correcting credit reporting errors may be a time-consuming process, the end result is worth the work. Removing damaging credit reporting errors can leave a consumer with a higher credit score. This helps him obtain approval for loans, credit cards, insurance and even housing more easily
Sources:
The Fair and Accurate Credit Transactions Act (Title II/Section 211)
The Fair Credit Reporting Act (Section 611/613)
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