Your credit report is the foundation for your financial success.
If you want to buy a home or a car, your credit report is the key. Credit reports also matter if you want to rent an apartment or even get a job. They’ll also determine what kinds of interest rates you’ll get on credit cards and other loans.
Lenders want to know you’re a good credit risk. If they allow you to borrow money, they want to be reasonably certain you’ll pay it back.
Lots of consumers ignore their credit reports until they want to borrow money, only to find there are mistakes that make them look like bad bets for lenders.
Unpaid bills. Collections cases. Late payments. Judgments.
Everyone can check their credit reports once a year for free at AnnualCreditReport.com. Using this website, you can get your reports from the three big credit bureaus – Experian, Equifax and TransUnion – all at once, or you can space them out throughout the year.
If you haven’t checked your reports recently, we recommend you do it today.
Look to make sure all the items are accurate., and be sure to check all three reports because it’s possible they have different information.
If you find a mistake, here’s what to do.
Put it in writing
First, write to the credit bureau about the error. If you have any documents to support your claim, include copies – never originals – with your request.
Your letter should include information that clearly shows which item you’re disputing – you could even include a copy of your report with the item highlighted – and give details about why the item is wrong. Then ask the bureau to remove or correct the error.
Send the letter “return receipt requested” so you can track your request.
The Federal Trade Commission (FTC) offers this sample letter for consumers to use as a template.
What happens next
The credit bureau has 30 days to investigate your claims.
“After the information provider receives notice of a dispute from the credit reporting company, it must investigate, review the relevant information, and report the results back to the credit reporting company,” the FTC said on its website. “If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit reporting companies so they can correct the information in your file.”
The credit bureau will let you know the results in writing, and you’ll get another free report if there was a change based on the investigation.
It will also send you the name, address and phone number of the information provider.
If your credit report – before the fix was made – was sent to anyone in the past six months, you can ask the credit bureau to send a notice of the correction to those entities.
And if your report was sent to a prospective employer in the past two years, you can request the corrections be sent there, too.
If your dispute fails
It’s possible the entity reporting the disputed information refuses to make a change when it’s contacted by the credit bureau. If that happens, for a fee, you can request that a statement of the dispute be placed in your file, and you can ask that the statement be sent to anyone who received a copy of your report in the recent past, the FTC says.
Next, write directly to the entity that provided the information to the credit bureaus.
Include the same information you put in your letter to the credit bureaus. The FTC offers another sample dispute letter to help.
“If the provider continues to report the item you disputed to a credit reporting company, it must let the credit reporting company know about your dispute,” the FTC said. “And if you are correct — that is, if the information you dispute is found to be inaccurate or incomplete — the information provider must tell the credit reporting company to update or delete the item.”
Make it a habit
You should always check your credit reports annually to make sure they’re accurate. It’s much better to fix items as they happen, rather than to be surprised when you’re turned down for credit.
And remember, the credit bureaus sell credit reports, but you can get them for free once a year at AnnualCreditReport.com.
Credit scores, though, are not free, and they’re not part of your credit report. You’d have to buy them from the credit bureaus, but before you do, check to see if your credit card or bank give them to customers at no charge.