Your credit report contains important information about you.  It generally includes facts about where you work, live and your bill-paying habits.  It also may state whether you’ve been sued, arrested or have filed for bankruptcy.  Companies called credit reporting agencies or credit bureaus compile and sell your credit report to businesses, which use it to evaluate your applications for credit, insurance, employment, and other purposes allowed by federal law.  Therefore, it is important that your credit report contain complete and accurate information.  Some financial advisors suggest that you review your report every three or four years to check for inaccuracies or omissions.  You also may want to check your report sooner if you are considering a major purchase, such as buying a home.

This brochure explains how to obtain a copy of your credit report and how to dispute errors.  It also provides a sample dispute letter and lists resources for additional credit information.

How to Obtain Your Credit Report

If you have been denied credit, insurance, or employment because of information that was supplied by a credit-reporting agency, the Fair Credit Reporting Act requires the report recipient to give you the name and address of the credit-reporting agency that supplied the information.  If you contact that agency to learn what is in your file within 30 days of receiving the denial notice, your report is free. 

If you simply want a copy of your report, call the credit reporting agencies listed in the Yellow Pages under “credit” or “credit rating and reporting.”  Call each credit reporting agency listed since more than one agency may have a file on you, some with different information.  You may have to pay a reasonable charge for each report.

How To Correct Errors

You have the right, under the Fair Credit Reporting Act, to dispute the completeness and accuracy of information in your credit file.  When a credit-reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a “reasonable period of time,” unless it believes the dispute is “frivolous or irrelevant.”  If the credit-reporting agency cannot verify a disputed item, it must delete it.  If your report contains erroneous information, the credit-reporting agency must correct it.  If an item is incomplete, the credit-reporting agency must complete it.  For example, if your file showed that you were late in making payments on accounts, but failed to show that you were no longer delinquent, the credit-reporting agency must show that your payments are now current. 

Or if your file showed an account that belongs only to another person, the credit reporting agency would have to delete it.  Also, at your request, the credit-reporting agency must send a notice of correction to any report recipient who has checked your file in the past six months.

If a reinvestigation does not resolve your dispute, the Fair Credit Reporting Act permits you to file a statement of up to 100 words to explain your side of the story.  The credit-reporting agency must include this explanation in your report each time it sends it out.  Credit reporting agency employees often are available to help you word your statement.

Be aware, however, that when negative information in your report is accurate, only the passage of time can assure its removal.  Credit reporting agencies are permitted by law to report bankruptcies for 10 years and other negative information for 7 years.  Also, any negative information may be reported indefinitely for use in the evaluation of your application for:

$50,000 or more in credit;

a life insurance policy with a face amount of $50,000 or more; or

consideration for a job paying $10,000 or more.

How to Register a Dispute

You must make your dispute directly to the credit-reporting agency.  Although the Fair Credit Reporting Act does not require it, the Federal Trade Commission staff recommends that you submit your dispute in writing, along with copies (NOT originals) of documents that support your position.

In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, explain why you dispute the information, state the facts, and request deletion or correction.  You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the one at the end of this brochure.

Send your dispute by certified mail, return receipt requested, and keep copies of your dispute letter and enclosures.  By doing so, you can document what the credit reporting agency received.

Adding Accounts to Your File

Your credit file may not reflect all of your credit accounts.  Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to credit reporting agencies.  Those not reporting to credit reporting agencies include, for example, some travel, entertainment, and gasoline card companies, local retailers, and credit unions. 

If you have been told that you were denied credit because of an “insufficient credit file” or “no credit file” and you have accounts with creditors that do not appear in your credit file, you can ask the credit-reporting agency to add this information to future reports.  Although they are not required to do so, many credit reporting agencies will add other verifiable accounts for a fee.

For Further Information

The Federal Trade Commission has a series of Facts for Consumers

discussing credit issues.  Titles include:

Building a Better Credit Record

Credit and Divorce

Credit Billing Errors

Fair Credit Billing

Fair Credit Reporting

Fair Debt Collection

Fix Your Own Credit Problems

Solving Credit Problems

Women and Credit Histories

To obtain free copies of these publications, contact: Public

Reference, Federal Trade Commission, Washington, D.C. 10580;

(101) 316-1111.  TDD (101) 316-1501.  You also may contact Public

Reference for a copy of our Best Sellers, a listing of the FTC’s

consumer brochures.

SAMPLE FAIR CREDIT REPORTING ACT DISPUTE LETTER

Date

Your Name

Your Address

Your City, State, Zip Code

Complaint Department

Name of Credit Reporting Agency

Address

City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file.  The items I dispute also are encircled on the attached copy of the report I received.

(Identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.)  This item is  (inaccurate or incomplete) because  (describe what is inaccurate or incomplete and why).  I am requesting that the item be deleted  (or request another specific change) to correct the information.  Enclosed are copies of  (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and  (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List of whatever you are enclosing)

Facts for Consumers from the Federal Trade Commission

Fix Your Own Credit Problems—May 1991

If you are having trouble getting credit, ads that promise to fix your credit history or clean up your credit report may sound like the answer to your problems. But before you pay a credit repair clinic to “fix” your credit record, learn what the law says and consider saving your money by making some phone calls yourself.  Under the Fair Credit Reporting Act, you have the right to learn what your credit report says. If you have been denied credit based on a report from a credit bureau, the creditor must provide you with the name and address of the credit bureau it contacted.   If you contact that bureau within 30 days to learn what is in your file, there is no charge for this service.

If you simply wish to learn what is in your credit file, check the Yellow Pages under Credit Bureaus or Credit Reporting Agencies. If several are listed, call to find which ones keep your file. Credit bureaus may charge to give you file information. Their fees usually range from $5 to $15.

After you review your credit record, contact your credit bureau if you find inaccurate information in your file. By law, the credit bureau must investigate it and, if it is inaccurate, remove it.

However, if the information is accurate, no one can require the credit bureau to remove it _ unless it is outdated. If you have been late paying your bills during the last seven years, the law permits the credit bureau to tell creditors about your history of late payments. Bankruptcy may be reported for 10 years. That is the law. If anyone tells you that they can remove negative but accurate information from your file, they are making promises that they cannot keep.

If you are having problems paying your bills and need help, you have several options. You can contact the companies you owe money and try to work out an adjusted repayment plan yourself, or you can check your telephone directory for non-profit financial counseling programs to get help. Some universities, local county extension agents, military bases, credit unions, housing authorities, and banks operate such programs and charge little, if anything, for their assistance.

You also may want to contact a Consumer Credit Counseling Service (CCCS), a non-profit organization with more than 850 offices located in 50 states. CCCS counselors will try to arrange a repayment plan that is acceptable to you and your creditors, and they also will help you set up a realistic budget. Check the White Pages of your telephone directory to get the number for the CCCS office nearest you, or call 1-800-388-1117 using a touch-tone phone.

If you have other questions, write or call: National Foundation for Consumer Credit, 8611 Second Avenue, Suite 100, Silver Spring, MD 10910, (301) 589-5600.

For more information about credit, write: Solving Credit Problems, Public

Reference, Federal Trade Commission, Washington, D.C. 10580.