Did you know that experts estimate that 1 in every 4 credit reports contains an error? This error could be costing you real dollars and cents!
According to the Fair Credit Reporting Act, a federal law passed in 1970, you are entitled to dispute any information on your credit reports that you believe is incorrect, inaccurate, or questionable. It is amazing that such an influential piece of information, your credit report, is haphazardly put together.
The major reason that so many individuals will discover incorrect information on their credit reports is because it costs the credit bureaus money to investigate and remove incorrect information from your credit reports. You may be surprised to hear that this money is otherwise profit for the credit bureaus. In other words, when the credit bureaus do investigate your dispute and spend time and resources, it is less profit.
The credit bureaus report billions of dollars in revenue every year! Just Equifax in 2010 reported $1.86 billion in revenue. The majority of this revenue is generated when an employers, creditors, insurers or other businesses check your credit history.
Experts say there is a conflict of interest for the credit bureau to decide how much of their potential profits they will spend to remove an error from your credit. This is why the Fair Credit Reporting Act was passed by Congress.
To regulate and require the credit bureaus to spend this money. Critics believe that the $235.2 million dollar profit just by Equifax, not counting the other two major credit bureaus Experian and TransUnion is used to buy political influence.
It would be interesting to know if or how much money is spent in Washington by the credit bureaus with lobbyists. I’m sure you have heard that is is not an easy process to remove errors from your credit report. Many consumers have turned to professional credit repair companies to help. And Congress responded by passing the Credit Repair Organizations Act, to regulate this industry and their operations to help you.
3 Steps To Disputing And Removing Errors From Your Credit Report’s
1. Get current copies of all 3 of your credit reports
It is vital that you get current and updated copies of all 3 of your credit reports. This means that you will need to get your Equifax, Experian, and Trans Union credit report. You may be surprised to find different information on each of these credit reports. This is often because some lenders will not report to all 3 of the credit bureaus.
An amendment to the Fair Credit Reporting Act enables you to get a copy of your credit report from each of the 3 major credit bureaus for free. You are only permitted one copy of each report every 12 months. To get your free credit report you must visit www.annualcreditreport.com or you can call 1-877-322-8228, and additionally you can 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 can not contact the credit bureaus and get a free credit report. If you do contact any one of the 3 major credit bureaus, they will refer you to Annual Credit Report Request Service.
You will be required to provide your name, address, date of birth, and Social Security number, and possibly a previous address if you have moved in the last 2 years. You are also entitled to get a free credit report if you are turned down when you apply for:
- New credit
- A new job
- Or insurance
However you will need to get this report within 60 days of your rejection, if you want it for free. And you are entitled to a free credit report if you are:
- Unemployed and intend to look for a job within the next 2 months
- On welfare
- Have been a victim of fraud or identity theft
If you do not qualify for any of the above or have already received your free credit report in the past 12 months. You should purchase a credit report from the credit bureau directly. You will have to pay for this credit report however it is a relatively low cost, as of today we see that you may have to pay up to $11. That’s probably not going break your bank especially if your already living with the expense of bad credit.
To contact the credit bureau bureaus directly:
2. File your credit report dispute with the 3 major credit bureaus
There are 3 methods to file a credit report dispute, online, over the phone, or through the mail. We strongly suggest that you file your dispute using certified mail with return receipt requested. This way you can send copies of supporting documentation that the item in question is not accurate and should be removed, it also provides you documentation that the credit bureau received your dispute.
Did you know that the Federal Trade Commission fined all 3 credit bureaus $2.5 million! Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection said: “The reality is that consumers never got the access to the consumer reporting agencies that the law guarantees.”
According to credit insiders, the credit bureaus were required to set up toll free phone numbers to enable consumers to dispute their credit report information, but neglected to have an adequate number of staff to answer and handle telephone disputes. There was one consumer complaint after another and eventually the Federal Trade Commission conducted an investigation.
3. The credit bureaus are required to investigate your dispute
The Fair Credit Reporting Act requires the credit bureaus to investigate your dispute, often within 30 days of receiving your dispute. However the credit bureaus can deem your dispute frivolous, and if this happens they will not investigate. Critics of the 3 major credit bureaus say this is nothing more than stall tactics, and say it is standard operating procedure for the credit bureaus to find your initial dispute request as frivolous.
If this happens you must remain persistent and comply with any additional information that the bureaus requests. When the credit bureaus investigate they will contact the business or lender that reported the negative information about you. And ask them to verify:
- The account
- Date of activity
- And any other relevant information
If the original lender or business that reported your negative information does not verify your account then by law the credit bureaus must remove it from your credit report. If there is different information such as a different balance due, then the credit bureaus will update the information on your credit report.
If your account is verified during the investigation, then it will remain on your credit report. However that does not mean that you cannot still take action to resolve this debt and repair credit history. There are strict laws that regulate what information can and cannot be on your credit report. Further many creditors will be willing to negotiate a settlement and in exchange will stop reporting your information to the credit bureaus.
This will enable you to remove an old debt and delete bad credit from your credit reports. Because when the credit bureaus investigate the item as per your settlement agreement with the lender, they will not verify the account with the credit bureaus.
You will be notified by the credit bureaus of the results of their investigation. This is done by sending you a letter in the mail, along with an updated copy of your credit report. You can file your credit dispute yourself. However if you have:
- A number of items that you would like to dispute
- Don’t want to deal with the headaches of keeping up with this information and jumping through what experts consider arbitrary hoops that the credit bureaus are well known for requiring
- Or just simply having trouble getting a dispute deemed valid and the credit bureau to investigate
Then we would encourage you to consider getting credit repair help from an expert. Your credit report influences every aspect of your life:
- Where you live
- Where you work
- The interest rates you will pay for a line of credit
- If you are approved or rejected when you apply for new credit
- And much more
You will never be faced with any criminal or civil prosecution for filing a credit report dispute. The law says that you simply have to believe the item is incorrect, and an item can be incorrect for a variety of reasons including:
- Not my account
- Incorrect dates
- Wrong balance
- Your account has aged past the statute of limitations
- And more
Critics believe the reason so many consumers think that credit repair is illegal is a result of a public relation campaign by the credit bureaus. Remember the credit bureaus are spending money that is otherwise profit every time they investigate your dispute.
With stockholders to answer too the credit bureaus number one priority, is generating as much profit as possible. Just like any other businesses on the stock exchanges. Don’t just live with bad credit. You can remove information and get a clean credit report, people do it every single day.
But without an expert knowledge of the laws, how the credit bureaus work, how lenders or businesses will or will not verify accounts when the bureaus conduct an investigation. You are very likely going to experience some frustration, headaches, aggravation, and seriously consider giving up.
Before you give up get help instead. It will be much cheaper in the long run. You can usually pay a low monthly fee in the range of $80 – $100, and often there will be an upfront payment of around $100. If you choose to use professionals then you typically will only have to:
- Tell them what items you want to dispute
- Wait for investigation results from the credit bureaus
- You will need to forward on to the service
- That’s it
You are not required to hire a credit repair service but to put it into perspective the credit repair industry has emerged as a result of the credit bureaus not making it easy for you to remove an error. For more tips with Dan Willis sign up for our free newsletter, and you can get a free credit consultation by calling toll-free 1-877-418-7596.
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