Cardholders must fight to correct credit report errors
Dear Credit Score Report,
Back in 2007 was the first time I checked my credit score
via Experian. I had a score of 726, but also found that my personal information
was messed up. The more serious issue was that there were close to 10 accounts
displayed on my report when, in fact, I had only two credit card accounts. I
disputed the accounts that were not mine and got them removed. But for some
reason, Experian went ahead and removed the two credit card accounts that were
mine. Since then, every time I check my score, it always says "score
unavailable" due to no credit information. When I asked Experian about
this they told me to contact the credit card provider. I took their advice and
contacted the credit card company, but they told me to fix it with the credit
bureau. I have been going in loops for a long time now and still my case is not
closed. Could you guide me on to how to deal with this issue? -- Karthik
Hey Karthik,
In hopes of getting your credit report corrected once and
for all, take advantage of consumer protection law by disputing these ongoing
errors with both the bank and credit bureau.
You did the right thing by previously disputing the eight
accounts on your credit report
that weren't yours. Those items may have been
associated with someone else who shared your name, such as a relative, who had
a similar birth date or Social Security number to yours. "It's a good
thing to look and make sure it's your information that's associated with your
file," says Pavneet Singh, an attorney in the division of privacy and
identity protection with the Federal Trade Commission. That's because other
borrowers' accounts that appear on your credit report could go unpaid or
suddenly include high debt levels, damaging your credit. Of course, you also
want to make sure that your own accounts are listed in your credit history,
since insufficient information prevents your credit score
from being
calculated. With that in mind, you should contact both the banks that issued
your cards and reach out again to Experian.
The law will help you. The Fair Credit Reporting Act addresses how the credit bureaus
-- Equifax, Experian and
TransUnion -- are required to maintain, share and correct information listed in
consumers' credit reports. Additionally,
a rule implementing part of the Fair and Accurate Credit Transaction (FACT) Act
was put into effect in July 2010 to allow consumers to directly contact the bank about any reporting mistakes. "Before,
in a lot of cases, the consumer would file a dispute with the furnisher -- for
example, the credit card company -- directly," Singh says. Back then, the
credit card company often took action to help its customer in those cases, but
they didn't have to. "Now, because of the law, they are required to handle
the dispute," Singh says. So if you haven't already done so, you'll want
to also file a dispute with your card issuers.
So what steps should you take to file that dispute?
"The dispute process is very straightforward and begins with getting your
personal credit report," says Rod Griffin, director of public education
with Experian. "You can get a free report once every 12 months at
www.annualcreditreport.com. You can also get a free credit report from the
credit company used by the lender to make its decision if you have had adverse
action taken, such as having your application declined. The lender will provide
instructions for how to do so, usually in the adverse-action notice,"
Griffin says. You can also get a free credit report if you are a fraud victim,
are out of work and are looking for a job or receive government welfare
assistance, he adds. Or you can purchase your report from the bureaus.
Once you have your credit report in hand, just how you file
a dispute is important. Consumer experts say you should mail your dispute
letter, along with copies of any supporting documentation, to both the bank and
the credit bureau. In the letter, outline what actions you have already taken
to clean up your credit report. "He would want to provide information
about what he disputed previously," says the FTC's Singh. As for that
supporting documentation, include copies of your credit card statements (retain
the original documents for your records) from the two banks that should appear
on your credit report. "I recommend sending any supporting documentation
and sending it certified, in case you don't get an answer in the required 30
days," says Sandy Shore, senior counselor with New Jersey-based consumer
credit counseling agency Novadebt. Using certified
mail will let you know the dispute letters have been received. Be sure to list anything and everything that
looks wrong. "You can dispute each account item," says Griffin.
"There is no limit on the number of items you can dispute."
From there, it's up to the credit reporting agency and the
card issuer to take action. "Experian then contacts the source or sources
of information with your disputes," Griffin says. "The source(s) are
required by federal law to review their records and respond within 30 days. The
source will respond in one of three ways: The information is accurate as reported; the
information should be updated, along with the appropriate updates; or the
information should be removed," he says in an e-mail.
Once the correct accounts appear on your credit report, it
could take about half a year until your credit score can be calculated.
"Most scoring systems can calculate scores with six months of data, many
can do so with as few as two or three months," Griffin says. According to
the website
for FICO, creator of the most widely used scoring model, your score can be
generated if your credit report contains at least one account that has been
open for six months or more, at least one undisputed account that has been
reported to the bureau within the past six months and no indication on the
credit report that you are deceased.
If you take all those steps and still don't get any closure
on this issue, then it's time to file a complaint with the FTC.
"He can certainly file a complaint with us. We look at those complaints
generally, but we can't necessarily resolve each one," Singh says.
In other words, when it comes to credit report errors, consumers
must fight for their own credit files' accuracy.
Good luck!
-- Jeremy
See related: FICO reveals how common credit mistakes affect scores, Credit report error? You can go direct to merchant, How to dispute credit report errors, Credit report anatomy: How to read, understand reports, FTC aims to clarify disclosure of consumers' credit reporting rights, Decade-old credit mistakes shouldn't appear on your report
Jeremy M. Simon is a former CreditCards.com reporter who wrote about credit scoring, economic data, credit card crime and other issues. He is based in Austin, Texas. He is a graduate of Vassar College and has previously worked for Thomson Financial in New York City, where he wrote about the stock markets, and Texas Monthly, as well as several publications in Austin.
Send your question to The Credit Score Report.
Published: September 14, 2010
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