Just a few short years ago, a law was enacted which said that you could get a copy of your credit history report free once per year. This was a great idea, and a lot of people took advantage of this. But still, the one thing that puzzles me is why more people are not taking advantage of this law?
At the core of things, I think the reason is that very few people realize that their credit reports contain inaccurate data, or more precisely, ERRORS. For the most part, this is due to the large numbers of records that the credit bureaus need to manage for each consumer and business entity in the US. This is further complicated when a particular lender decide to start reporting to one credit bureau versus another.
I mean, think about it for just a second. If you add together all consumers and all businesses in the US, then add at least one record for each loan or credit card account they currently have or ever have had, you arrive at an incredible number which represents BILLIONS of records. That is a system administrators nightmare but it is the job they took on. Now if only 1% of that database is in error, then that means that there are MILLIONS of records with errors, and the actual percentage shown in recent studies if more than 25% are in error!
Something that most consumers are not aware of is they THEY have the responsibility for making sure that those errors get corrected. They do not self-correct over time. The only way will ever get fixed so that the right data is showing is if YOU dispute the data with the credit bureaus. And you need to do it separately with each credit bureau TransUnion, Equifax, and Experian because all three of them probably have different errors!
One of the biggest problems with having errors in your credit report is that your credit score is not reported accurately. This could be good or could be bad, but for the most part, you need to assume it is bad and that the credit score assigned to you by the credit bureaus (individually) is lower than it should be.
So how do you get that fixed? You need to take action and take that action now without delay. Get a copy of your credit report from each of the three major credit bureaus, and then go over it with a fine tooth comb to find negative information and inaccurate information. Maybe you had a period of time where you were going through a rough time or were unemployed, where you got behind on your bills that will be reflected there. But if you have taken care of that debt in the meantime, chances are good that the creditor will not be able or willing to PROVE this, and will go with your dispute.
What happens when you dispute something is that the credit bureau has 30 days in which to either verify the information, or to remove it. If it cannot be verified, then they have a legal obligation to remove it. So for an account that has been paid off for 3 or 4 years, what incentive is there for the lender to verify that information? There is none, and chances are good that the negative information will be removed.
Then there is the stuff that is REALLY wrong, and you have every right to request that your credit report reflect accurate information. The procedure is exactly the same file a dispute with the credit bureau stating the facts, and they have 30 days to either get that information verified or to remove it.
When your credit report is squeaky clean, your resulting credit score will be as high as it should be, and that is, after all, what you wanted to accomplish!
By: Jon Arnold