The FCRA gives you the right to dispute inaccuracies or omissions, and it requires credit bureaus to investigate your complaint (generally within 30 days), send you a prompt response and correct any errors. The law also requires the source of inaccurate information (such as a bank) to correct the record at the credit bureaus to which it initially provided the erroneous information.
Staff at the FTC, the government agency responsible for ensuring credit bureaus' compliance with federal laws, suggest the following: Immediately tell the credit bureau, in writing, about information you believe is incomplete or inaccurate. Include copies, NOT originals, of any documents that support your position. Clearly identify each item in your credit report that you dispute, state the facts and request a correction. Send your letter by certified mail and request a return receipt to document that your complaint arrived at the credit bureau. Keep copies of your dispute letter and enclosures. Also contact the company that provided the inaccurate or incomplete information to the credit bureau and request a correction of its records, too. If a credit bureau's investigation does not resolve your concerns, the FCRA allows you to submit a brief statement about the matter, in 100 words or less, that must be attached to your credit report and provided to anyone that accesses your report in the future. This enables you to tell potential lenders or anyone else who sees your credit report your side of the story.
Note: While there are hundreds of other credit bureaus around the country, there is little reason for consumers to review and correct these credit reports, according to the FDIC's Herman. "Those smaller credit bureaus typically get most or all of their information from the big three," he says. "If you obtain copies of your credit reports from Equifax, Experian and TransUnion on a regular basis and you make sure they are accurate, it's likely you'll be addressing problems at other credit bureaus, too."
What if I have a question or complaint involving a credit bureau?
First, try to resolve the matter with the credit bureau directly. If you're not satisfied, contact the FTC. The FTC does not resolve individual disputes, but it does provide useful information that may help consumers resolve their problems. Awareness of consumer complaints also enables the FTC to spot patterns of problems that may trigger an enforcement action.
What is a credit score and why is it important?
A credit score is a number calculated by a credit bureau, a lender or another company intended for use in making a decision on a loan application or other product or service. (For example, many lenders use a system developed by Fair Isaac and Company called the "FICO score.") Think of credit scoring as a point system based on your credit history, designed to help predict how likely you are to repay a loan or make payments on time. Everyone with a credit record also has a credit score. Different lenders and other companies may use different scoring systems, so your score (and the products or services you're offered as a result) may vary significantly from one source to another.
In general, the better your credit score the better your chances are of getting a loan with an attractive interest rate. Alternatively, a poor credit score may mean you can only qualify for a "subprime" loan—one with a higher interest rate and higher fees than those offered to applicants with "prime" credit records. So when it comes to getting a good loan, it's important that your credit report—the basis for your credit score—is accurate, complete, and in the best shape possible.
