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Dispute Credit Report: Ways to Dispute Credit Errors

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Dispute Credit Report Errors

Credit reports have increasingly become consumers’ passport to the financial world. Whether you want to rent an apartment, get car insurance or apply for a credit card, the data in your credit report will be one of the crucial measures used to judge you.

That’s why you want to ensure that the information in your report — which is used to formulate your credit score — is free of any inaccuracies. Even if you’re not denied credit, a small error here or there can cost you more in interest.

The three big credit bureaus — Equifax, Experian and TransUnion — and the entities that provide them with data (like lenders) are required to investigate any potential errors. But, as I reported in a recent story, their investigations aren’t very thorough.

So as with most everything else, you need to be your own advocate. Here are several tips on the right way to file a dispute, compiled from consumer attorneys, credit experts and consumer advocates.

Get your report. There’s only one place you should go to get a copy of your credit report: AnnualCreditReport.com. All consumers are entitled to one free credit from each of the three major credit bureaus through this site. (In fact, you can forgo the credit monitoring services many of them sell by creating your own: simply order a report from one of the agencies once every four months.)

Create a paper trail. The credit bureaus allow you to file your dispute online, and it’s probably the fastest and simplest way to go. But don’t. Experts say it’s better to send a written dispute via certified mail (return receipt requested).

Sending a written complaint may not help resolve your problem any more than filing an online dispute. But it will help later on, say, if your problem isn’t resolved or if you eventually need to show a record of your efforts in court.

Don’t be restricted by the dispute forms that the bureaus recommend you use. Experts recommend coloring outside of those lines. Attach a letter that explains the problem, and provide copies (not originals) of any supporting documentation, like a canceled check illustrating that you made a payment. The Federal Trade Commission has a sample dispute letter on its Web site.

The credit reporting bureaus are required to forward all relevant information to the organization that is the source of the error, though consumer advocates and lawyers told me this never happens. (In fact, the system the bureaus use to communicate with creditors doesn’t allow them to forward any attachments. Instead, workers boil down all the information you send into a one- to three-digit computer code — for instance “account not his/hers.” That’s what is forwarded to the creditor, who must then perform an investigation of its own.) More at How to Dispute Credit Report Errors

You can also check out this video for more on Dispute Credit Report:

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What is My Credit Score: FICO® Score Estimator

“Wondering what your credit score is? Let the FICO Score Estimator help. Check it out below now!”

The Question

How FICO Scores Work
When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they’d take by loaning money to you.

FICO scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus – Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. As this information changes, your credit scores tend to change as well.

Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time.

Taking steps to get your FICO scores in the higher ranges can help you qualify for better rates from lenders.

Higher FICO Scores = Lower Payments
The higher your FICO® scores, the less you pay to buy on credit – no matter whether you’re getting a home loan, cell phone, a car loan, or signing up for credit cards.

You can roughly estimate your actual credit score with this free score estimator from FICO®, the most trusted name in credit scoring. Here’s how it works: Answer these ten easy questions and we’ll give you a free estimated range for your three FICO® scores.

What do you mean I might not have a score?
You won’t have a credit score unless you’re older than 18 and you’ve had a credit card in your own name for longer than six months. So, if you’re young or you pay with cash, you likely don’t have a score. Or, if you’re young and have only had a single credit card for a short period of time, you may not have a score yet either. So go ahead and answer the questions and get an idea. It’s free, it’s easy, and you don’t have to give up any personal information.

1. How many credit cards do you have?
I have never had a credit card
1
2 to 4
5 or more

2. How long ago did you get your first loan?
(i.e., auto loan, mortgage, student loan, etc.)
I have never had a loan
less than 6 months ago
between 6 months and 2 years ago
2 to 5 years ago
5 to 10 years ago
10 to 15 years ago
15 to 20 years ago
more than 20 years ago
More at FICO® Score Estimator

Still asking “What is my Credit Score?”, then watch this video:

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Credit Report Dispute: Ways to Dispute Credit Report Errors

“Want to do a credit report dispute but not sure how? Let this article help. Check it out now!”

Ways to Do a Credit Report Dispute

In the early 70’s the Fair Credit Reporting Act (hereafter “FCRA”) was enacted as a way to set guidelines regarding credit reporting industry practices, procedures and consumer protections.

That Act has evolved over time, and thanks to multiple amendments the current version gives consumers a variety of options when it comes to challenging information on their credit reports.

Those options are:

1. The Most Common Method – Direct to Credit Bureau
By far the most common way consumers challenge information on their credit report is by filing a dispute directly with one or more of the national credit reporting agencies; Equifax, Experian and TransUnion.

You can file a direct-to-bureau dispute via the credit bureaus’ websites, a letter or over the telephone.

When the credit bureaus receive your communication they are obligated by the FCRA to show the offensive item as being “in dispute.” They are also obligated to contact the furnishing party, normally a bank or collection agency, and verify the accuracy of the information in dispute.

This process cannot take longer than 30 to 45 days and if the mistake is on all three of your credit reports then you have to repeat this process–times three.

The form sent by the credit bureaus to banks and collection agencies is called an “ACDV”, or automated consumer dispute verification form. This form is normally sent electronically via a system called e-OSCAR.

2. The Not So Common Method – Direct to Furnisher
It’s not a huge secret but consumers are also allowed to file disputes directly with the party that furnished the allegedly incorrect information to the credit bureaus.

So, instead of trying to reach someone with the credit reporting agencies all you have to do is call your bank or the collection agency and let them know you are disputing the credit reporting of some item and you want it corrected.

When you file your dispute direct-to-furnisher, they are also obligated to communicate to the credit bureaus, all of them, that you are challenging the item and the alleged mistake is properly noted as being “in dispute.”

The furnisher also has the same obligation to perform an investigation. If they determine that the item is in fact incorrect, a correction must be sent to all three of the credit reporting agencies.

This process is called “carbon copy.”

The form sent by the banks and collection agencies to correct their credit reporting is called a “UDF”, or universal data form. This form is also normally sent electronically via the e-OSCAR system. More at 3 Ways to Dispute Credit Report Errors

You can also check out this video for more Credit Report Dispute tips:

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