It's a good idea to check your credit report periodically to ensure that it is free of errors. Ideally, you want to have all potential errors corrected before your report is seen by a potential creditor. This particularly the case if you intend soon to apply for a major form of credit such as a mortgage or insurance.
But how often is it advisable to do this check? Does the check itself come with potential drawbacks? Is it costly?
There are no inherent negatives to you obtaining a copy of your own credit report (it does not lower your credit score, for example), although too many requests from other parties are a potential negative. The Fair Credit Reporting Act mandates by law that you are entitled to a free copy of your report -from each of the three main bureaus- within any 12 month period. The three bureaus, Equifax (read more on Equifax here), TransUnion and Experian operate independently and do not exchange or share information on your report. As such, it is necessary to check all three reporting agencies for potential errors.
It used to be that one had to figure out the proper way to write a formal letter to request a report from each of the three bureaus, but the Web has simplified things greatly. The three bureaus now work together online to offer consumers copies of their reports through the Website Annual Credit Report.com ( www.annualcreditreport.com ). It is still necessary to fill, print out and send a copy of the form to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
So what happens if you review your file and find errors contained therein? You must then write a formal letter to the company in question and request a correction of information. You must supply copies of all supporting documentation that you have and you must itemize and specifically point out the exact nature of the errors in terminology used on your report. The reporting agency is required by law to investigate the matters in question and provide you with a timely (usually within 30 days) written response to your request which notifies you of the results of their investigation and the corrections they have made. The exception to this is if you send a frivolous request.
Be sure to send a copy of your letter of dispute to the creditor who provided the bureau with the erroneous information. This is useful because it can lead to the creditor contacting the bureau to make the correction themselves. In fact, they must do this by law. Of course, be sure to send copies of all supporting material to the creditor as well.
Below are the mailing addresses and phone numbers of the three major credit bureaus:
Equifax 800-685-1111 www.equifax.com
P. O. Box 740241
Atlanta, GA 30374-0241
Experian 888-EXPERIAN (888-397-3742) www.experian.com
P. O. Box 9595
Allen, TX 75013-9595
Recommended Format of a Credit Report Dispute Letter:
City, State, Zip Code
Name of Credit Report Company
City, State, Zip Code
Dear Sir or Madam:
I am writing to you to inform you of the following errors I have found on a copy of my credit report obtained from [Name of Credit Reporting Agency]:
Item 1: [Example of error].
[Explanation of your disagreement and listing of supporting documents].
Item 2: [Example of error].
[Explanation of your disagreement and listing of supporting documents]. . . . . . .
The Credit Reporting Companies are required to send you a copy of your corrected credit report (if such corrections were indeed made after your complaint). This is a complimentary copy not related to the annual copy you are entitled to. If you ar enot satisfied with the resolution provided by the bureau, you have the right to have your dispute claim attached to your report for the future so that your claim is seen by future potential creditors.
If you are still not satisfied with the actions of the bureau or if you believe they have responded or behaved in an improper manner, the Federal Trade Commission is an avenue you have for filing a complaint. Use the Consumer Complaint Form they make available online for this purpose.