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Information on mortgages, home equity loans, and consumer credit to help you use the power of financing to your advantage.
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Credit > Consumer Credit Reports
My credit report is long and confusing and has some mistakes. What should I do?
MEG RICHARDS, AP Business Writer. Associated Press
Copyright Associated Press.
I Q. I ordered my credit report, and it is long and confusing and has some mistakes. What should I do?
A. If you ordered a copy of your credit report and found parts of it were less than accurate, you're not alone. According to a recent survey by the U.S. Public Interest Research Groups, 79 percent of credit reports contain some sort of error, and 25 percent include mistakes serious enough to result in the denial of credit.
Obviously the time to find out a bad piece of data has damaged your credit is not when you're about to bid on your dream home. Credit reporting agencies are required to respond to complaints about errors within 30 days, and if a dispute results in a correction, they'll send you an updated report. But getting things fixed can take time, so it's best to start early.
"An individual's credit report is updated thousands and thousands of times over the course of a lifetime. So even if it's 99.9 percent accurate, there's still room for something to go wrong," said John Danaher, president of TrueCredit.com, a subsidiary of the credit reporting agency Trans Union LLC. "As far as getting something corrected, I would say it's easy and getting easier."
How you pursue disputes with credit agencies depends on how you get your report. If you ordered it online, you may be able to solve the problem through the agencies' Web sites. If you got it through the mail, or from a third-party Web site, you might have to make a copy of the report, highlight the parts in dispute, and write a letter explaining what's wrong. Some advisers recommend sending this to the agencies via certified mail.
The first step is to make sure you've got a report that tells you what you need to know: your credit score. This three-digit number, which generally ranges from 300 to 850, influences everything from the interest rates you pay on your mortgage, car loan and credit cards to your insurance premiums and even your chance of being hired for a job.
Free credit reports will be widely available after a new law takes effect later this year, but they won't include the all- important credit score. You can purchase reports with scores directly from the major credit reporting agencies _ Experian Information Systems Inc., Equifax Inc. and Trans Union _ for about $13 each. Some Web sites will sell you all three reports and scores for $39. It's a good idea to check them all, because you never know which one your lender will rely on.
Be prepared to set aside some time to go through your credit files, as each one may be upwards of 25 pages, depending on how much you've relied on credit over the years. With thousands of dollars in future interest payments at stake, you'll want to look each one over carefully.
If a credit reporting agency has misspelled your name or gotten your employer or your address wrong, it's not a big deal _ it won't lower your score or keep you from getting credit _ but it's worth disputing the error because it's one less thing you'll have to verify when you are seeking a loan. The part you should really concentrate on is your transaction history, because this is where you might spot the first signs of identity theft _ like credit cards in your name that you've never applied for.
"If you see things that are suspicious, you should start filing disputes through the credit bureaus and maybe put a fraud alert on your file," said Ryan Sjoblad, spokesman for MyFICO.com, the consumer division of Fair Isaac Corp., which compiles the well- known FICO credit score. "This is an alert you can put on your credit report which will prevent anyone from taking out credit in your name without you being called first."
People with similar names may have problems; for example, the credit reports of a father and son with the same name may get mixed up. If you have a very common name, you may see an item that you're not responsible for _ a household or medical bill _ appear in collection. This can lower your score, and should be disputed.
Sometimes creditors themselves are the source of bad information, reporting on-time payments as being late, or not reporting when loans are paid in full. You also might find duplicate listings for the same debt, which can happen when one lender buys another's accounts. This can raise your total outstanding balance, which can lower your score. Another thing to watch for is negative items, such as late payments, older than seven years. These should be disputed, because except for some bankruptcies, most negative items should disappear after seven years.
Sometimes, after you've asked a credit reporting agency to correct an error, and they've fixed it and sent you an updated report to show you the change, the problem will return because the creditor has refiled the incorrect information. In these cases, you may have to contact the creditor directly, and follow up again with the reporting agency.
"Going through a credit report can be an overwhelming task," said Paul Richard, executive director of the Institute of Consumer Financial Education, a group that trains and certifies financial advisers to do credit report reviews. "If a consumer is stuck figuring out what's wrong with their credit, a professional may be able to help."
On the Net: www.myfico.com www.truecredit.com www.icfe.info www.equifax.com www.experian.com
Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
Dateline: Undated
Text Word Count 918
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• Credit > Consumer Credit Archive
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