Your credit score impacts the interest rate you pay for credit cards, home mortgage, car loans and, in some cases, stops you from even getting loans like these. You’ll also pay double the amount for interest with bad credit.
Make no mistake. Bad credit is costly. If there is a mistake on your credit report, then take the time to get it off. It can save you thousands of dollars.
There are three reporting agencies that make up your FICO credit score. These agencies are required by law to provide you with a free copy of your credit report every 12 months.
You can order your copy of your free credit reports through:
(1) Annualcreditreport.com or
(2) Call 877-322-8228
You will need to provide your name, address, Social Security number and date of birth. You’ll have to provide proof of the address (generally provided from a utility bill), and Social Security number (copy of your Social Security card or a pay stub).
The credit reporting company and the information provider are both required to correct inaccurate or incomplete information that is contained in your report. If you see a problem, follow these steps:
Tell the credit reporting which information is incorrect, and ask them to correct it. Here is a sample letter you may want to use:
(Your City, State, Zip Code)
(City, State, Zip)
Dear Sir or Madam:
I am writing to dispute the following information in my file. I have circled the items that I dispute on the copy of the report I received.
This item (identify which item) is inaccurate because (shortly describe why it is wrong). I am requesting that this item be (removed or revised) to correct the information.
Please (delete or correct) the disputed items as soon as possible.
Enclosures: (proof of your identity, proof of your Social Security number, copy of the credit report with the offending entry circled).
Mail the letter to the credit reporting company, with return receipt requested. Credit reporting companies must investigate all items in question. It is up to them, and the reporting party to prove that the information is correct. It is NOT up to you to prove it is incorrect.
You will receive a copy of the results from the credit reporting agency and a free copy of your report if the dispute results in a change. As you go through this process, you may discover that the credit reporting agencies vary in what information they have. You will need to check all three to make sure the wrong information has been removed or corrected.
Above all else, don’t give up. They must respond and they must investigate. Sometimes the agency will try to throw the ball back in your court and make you prove it’s incorrect. They do not have the right to do so. They are required to prove the information is correct, or remove it.