How to Fix Credit Report Errors

Did you know that up to 80% of all credit reports contain inaccurate, incomplete, or obsolete information? Did you know that you have the right to demand these inaccurate, incomplete, or obsolete items be corrected or even removed from your credit report entirely?

Under federal law, every person has the right to dispute bad information that appears on a credit report. It's a simple process that almost anyone can handle themselves (and due to some strange quirks of federal law, it's better for you to handle it yourself.

Step 1: Get your credit report. If you've recently applied for a loan and been denied or gotten worse terms based on your credit score, you should have received one. If you don't have a copy, you have the right to a free report once a year from each of the three major agencies. Just go to http://annualcreditreport.com and request your free report.

Step 2: Double-check the information for accuracy. First, look at any "negative" entries. Are they more than seven years old? Do they have error about the time of any late payments, the amount of the loan, or who you owed the loan to? Then, check the "header" information which identifies you. Is it correct or not? Is it all about you, or have they mixed you up with a similar name? Make a note of everything on your report you think needs correction. Then, write a short letter to the credit reporting agency (you'll find their address on the report itself, under "Disputes") and include enough information so the agency can investigate the error. They should respond within 30 days from getting your letter. (You may want to spend a few dollars on certified mail).

Step 3: See if the error gets fixed. If they fail to respond within, say, 45 days, or they fail to correct the error, you have the right to sue them to fix the error--and in most cases, you won't have to pay a dime for legal fees. If the agency fails to act, talk to a credit-report lawyer right away to find out your legal rights.