Although there is no guaranteed way to win a credit report dispute, understanding the process may help your odds when you go into battle. Fortunately for consumers, the credit card system functions fairly well. You’ll meet more people who have never had a credit card issue then those who have. In the case that you are faced with a financial dispute, here’s a quick guide to help you dispute your credit report the correct way.
What is Your Credit Report?
First, let’s go over what a credit report contains. When accessing your report you will come across a bountiful amount of detailed information regarding where you live, how you pay your bills, if you’ve ever been arrested, bankruptcy, etc. All of your credit accounts will be outlined on the report; including the dates they were opened, the credit limit/balance, and your payment history. All of the factors will play a role in determining your credit score. Other things that will be found on your credit report:
Credit Inquiries
Instances when your credit has been pulled within the last two years. It will be categorized as ‘voluntary’ or ‘involuntary’. Voluntary inquiries are when you have applied for a loan and you give authorization for your credit to be pulled.
Trade Lines
All of your credit accounts. It will include your mortgage, auto loan, bankcards and more.
Public Records and Collections
All of your records including debt collection, foreclosures, other legal issues and more.
All of this information is then sold by credit reporting companies to insurers, employers, creditors, and other businesses that evaluate your application for a new job, line of credit, or renting a home.
Why Check Your Credit Report?
Despite the fact that the federal Fair Credit Reporting Act encourages accuracy and privacy of information, financial advisors suggest reviewing your report periodically. But why would you need to check this information if it’s backed by the federal FCRA? Here’s a few that should come to mind:
Protect Against Identity Theft
Identity theft is something that is growing rapidly. With the growth of technology brings more opportunities for criminals to hijack your identity and cause major problems without a trace. Checking your credit report can help detect any actions that might indicate identity theft. Learn more about identity theft here.
Check Your Information for Accuracy
You need to make sure that all of your information is correct on your report. Inaccurate and outdated information can hinder you from obtaining a loan and making major purchases. If you notice that your information is wrong, you can follow these steps.
How to Verify Your Credit Information
So how can you verify the accuracy of your credit information? By law, each nationwide credit reporting company— Equifax, Experian, Transunion—is required to provide a free copy of your credit report once per year. To access a free copy of your report visit wwww.annualcreditreport.com or call 1-877-322-8228. You can also complete the Annual Credit Report request form and mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You will need to provide your name, address, social security number, and date of birth. to remain confidential and protect your privacy, each nationwide credit company may ask information that only you would know the answer to. After you receive your reports, careful study the information provided and educate yourself on your score and your report. Keep in mind that it is not uncommon for consumers to find mistakes in their reports. In fact, CBS News recently reported that 79 percent of all credit reports contain some type of error – and 25 percent contain such serious errors that those individuals could be denied credit. If you come across any misinformation, contact the individual credit reporting company immediately.
