My Credit Report Is Screwed Up

Credit reports play a critical role in a person's financial life. These reports include information, available to creditors, about a person's lending history. The contents of a credit report, which are used to form the person's credit score, determine whether a person is eligible for various loans and, if so, at what rate of interest. Therefore, if a person finds an error in his report, particular one that lowers his score, he should hasten to correct it.

Credit Report Laws

Credit reports are maintained by private companies called credit reporting companies. While these companies are not obliged to change the information in these reports if it is correct, they are obligated by federal law to correct erroneous information. The three major credit reporting companies -- Equifax, Experian and TransUnion -- all have slightly different methods of correcting errors, although all require that individuals write letters informing them of the errors.

Letters

A person wishing to correct his credit report should send a letter to one of the three main credit reporting agencies. This information will then be passed on to the other two. The company will likely provide a specific form that the person needs to fill out and sign. The company may correct the report immediately, or it may first contact other parties to verify that the change is factually correct.

Credit Scores

A person's credit score is affected the minute that information on the report is changed. Once the error has been corrected, the person's credit score immediately reflects the new information and either goes up or down, depending on its nature. Although credit reporting companies are legally obliged to correct errors, they are not financially responsible for making them: a person cannot sue if an error caused him to face higher rates on a loan.

Considerations

Not all information on a credit report is necessarily worth going to the trouble of correcting, as not all information affects a person's credit score. For example, if a credit report incorrectly lists a person's previous address -- particularly in a small way, such as through a typo -- the person's credit score will not change if the error is corrected, making the change unnecessary.