Understanding Your Credit Report Part 2

From the desk of Rob Ruston:

CREDIT: Part Two; Fixing Errors in Your Report.

This edition of Robs Report is the second of a three part series on Credit.

One of the most commonly asked questions in my training classes is “How does the credit scoring system work?” This series of reports is an attempt to shed some light on the mysterious and often misunderstood world of credit scores.

Today we want to look at how you can go about fixing errors that you find in your report.

According to a survey conducted in June 2004 by The U.S. Public Interest Research Group; “One in four credit reports contains errors serious enough to cause consumers to be denied credit, a loan, an apartment or home loan or even a job…the big credit bureaus and big business tolerate big mistakes in credit reports,” said Ed Mierzwinski , U.S. PIRG Consumer Program Director. “But those mistakes ruin the financial reputations of hardworking Americans.”

U.S. PIRG collected 200 surveys from adults in 30 states who reviewed their credit reports for accuracy. Key findings include:

- Twenty-five percent (25%) of the credit reports contained errors serious enough to result in the denial of credit;

- Seventy-nine percent (79%) of the credit reports contained mistakes of some kind;

- Fifty-four percent (54%) of the credit reports contained personal demographic identifying information that was misspelled, long-outdated, belonged to a stranger, or was otherwise incorrect;

- Thirty percent (30%) of the credit reports contained credit accounts that had been closed by the consumer but incorrectly remained listed as open.

SOURCE:U.S. PIRG; One In Four Credit Reports Contains Errors Serious Enough To Wreak Havoc For Consumers, US PIRG Press Release 06/2004

http://uspirg.org/uspirgnewsroom.asp?id2=13650&id3=uspirgnewsroom

If you found errors in your report it may be in your best interest to make repairs on your own. The Federal Trade Commission for Consumers posted a warning in their report called; Credit Repair: Self Help May Be Best. In the report the said, “Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money”. The TFC went on to say “Do yourself a favor and save some money, too. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report…you can improve your creditworthiness…no one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.”

SOURCE: The Federal Trade Commission for Consumers; Credit Repair: Self Help May Be Best. http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm



Take time to look over your report, make sure the following information is correct: Your name; or names if you are or were married; Social Security number; Date of birth; addresses of places you’ve lived; names of places you’ve worked; pending accounts and accounts that have been closed.

The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. If you find errors in your report you can have them corrected by following these steps;

Make a copy of the report and circle the items you are questioning. Keep your original copy for your own records.
Prepare a letter to the Credit Reporting Agency (CRA-their address will be in the report) that provided you with the report in question, and request to have the erroneous items removed. If you have proof of payment for an item in question, include a COPY of that documentation.
Prepare a letter to the creditor reporting the problem, especially if you feel you are a victim of fraud or identity theft. Inform the creditor that you are disputing an error reported to the CRA, state why the claim is inaccurate, and include any relevant documentation to prove your point.
Send your correspondence via certified mail.
Below is a Sample Dispute Letter that you can use as a template

****************************************************

Date

Name

Address
Your City, State, Zip Code

Complaint Department
Name of Company Address City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)

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Credit repair is a simple process if you know what you are doing. And you can do it yourself. In fact, no one can do as good a job in repairing your own credit as you can. Best of all… Fixing your credit can be done for free.

There is a resource that I would recommend. It is a classic and is the best book on the market, detailing exactly how to do it, absolutely FREE.

Whether you have good credit, bad credit, or no credit, your credit can be improved. There are tricks and techniques you can use that can dramatically increase your credit score. You can find this resource at: http://tinyurl.com/gftbq


Next week I will talk about strategies you can use to improve your credit score. In the mean time I highly recommend MYFICO.com. They provide a service that will monitor your scores and coach you on how you can repair your credit and improve your score. Just ckick on the logo below.

Contributed By: Rob at www.Loanofficerfortune.com
Thanks again from your friends at NAMP.