Your credit report details your consumer financial history. While positive information may remain on your credit history indefinitely, some negative information can linger for up to 15 years. Lenders, insurance companies and even employers may use information found on your credit report to determine your financial reliability. Protecting your financial reputation involves monitoring your credit report regularly and disputing reporting errors. It may surprise you to learn that a considerable number of credit reports contain some type of error.
Statistics
Credit report errors may be simple spelling or demographic mistakes or potentially damaging financial information. A 2004 study by the United States Public Interest Research Group reports that up to 79 percent of credit reports contain errors. A quarter of the reports polled contained errors serious enough to deny the consumer credit. Twenty-two percent listed the same loan twice, and 30 percent showed loans closed by the consumer as still open and active.
Consequences
Errors on your credit report can lower your overall credit score, resulting in high interest rates, denial of credit, higher insurance premiums and high rental or utility deposits. Damaging errors may even prevent you from getting a job or promotion. While employers receive a modified version of your credit report, it still contains financial information. If you are denied advancement or employment, the company must inform you if the decision was based on consumer history information.
Obtaining Your Credit Report
Under the Fair Credit Reporting Act (FCRA), you are allowed a free copy of your credit report from each of the three major credit reporting bureaus---Equifax, Experian and TransUnion---once every 12 months. Additionally, if you are denied credit, insurance or employment due to your credit history, you may request a free copy of the report. In response to the FCRA, the credit bureaus compiled a centralized service allowing consumers to obtain all three reports in one place. You may order a copy of all three simultaneously or separately throughout the year online at annualcreditreport.com or by calling 877-322-8228. You can also request a report by mail by writing to the Annual Credit Report Request Service at P.O. Box 105281, Atlanta, Georgia, 30348-5281.
Correcting Errors
If you find an error on your credit report, you should send the credit bureau a dispute letter. You'll need to include copies of supporting documents with your claim via certified mail. The bureau contacts the company reporting the information and investigates the claim. If the items are deemed erroneous, they will be removed from your credit report. You may also contact the company reporting the information with proof of inaccuracies and have a note placed on your credit report stating that you dispute the information.
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