Erroneous Credit Reporting Practices

According to "Consumer Reports", on average there are 13 million erroneous credit entries reported by the credit reporting industry every year. Erroneous credit reporting practices can lower a consumer's credit score by 100 points or more. Erroneous credit card reporting practices are usually negative credit entries, like late payments, for a line of credit that does not belong to the consumer. Erroneous credit reporting practices can prevent a consumer from getting a job, renting an apartment or getting an auto loan.

Annual Credit Report Review

Everyone older than 18 should carefully review his credit report on an annual basis. Consumers who have encountered previous erroneous credit reporting practices should conduct a credit report review every three months.
A good time for consumers to conscientiously review her credit report is before making major purchases, or conducting any personal financial transactions, which will require a credit check. Annualcreditreport.com is a great website for consumers to obtain an annual credit report free.

Significance

An article published by Consumer Reports in 2007 reported a little more than 50 percent of consumers actually conduct credit report reviews, specifically looking for erroneous credit reporting practices. If every credit report was checked for erroneous credit reporting practices, there could be more than 26 million inaccurate credit entries being reported annually.
Credit checks are performed nearly every time a consumer applies for a cell phone plan, new utility service or a professional employment position. Auto insurance premiums are also based in part on a consumer's credit score.

Disputing and Correcting Inaccuracies

Fighting and correcting erroneous credit reporting practices can be accomplished by contacting the credit-reporting agency in writing reporting the erroneous information. Disputing erroneous credit reporting practices requires contacting each agency in writing individually.
Creditors, who furnish information to the credit-reporting agencies, are required by law to report any corrections to credit-reporting agencies. It is up to the consumer to make sure corrections are reported by the creditor accurately.

The Best Approach

Even though consumers battle erroneous credit reporting practices online from the credit bureau's website, there is a better way. A letter disputing the erroneous credit entry should be sent with a return-receipt request via the U.S. Post Office. The return receipt will prove that the credit-reporting agencies got the dispute letter.
Along with dispute letters, copies of records like receipts that back up the consumer's dispute should be sent. Original receipts and other original documents that support the consumer's dispute should remain in the possession of the consumer filing the dispute.

Creditor Notification

The credit-reporting agencies are required by law to notify the creditor that made the erroneous information available, and supply them with the letter of dispute and pertinent supportive records. Credit reporting agencies generally have 30 days to conduct an investigation and render a decision on disputes.