Fixing Credit Report Mistakes

A widely touted governmental study from 2004 found that as many as twenty five percent of all credit reports contained egregious mistakes that wrongly lowered the ultimate FICO credit scores: and, accordingly, led to limited borrowing capacity and interest rates several points higher than they needed to be. The errors could be due to debts held by similarly named consumers placed upon a credit report by complete accident, duplicated loans that thoroughly skewed the debt to income ratios, errors in credit card debt amounts being paid on time, delinquencies that did not exist which the consumer could easily prove through bank records (some unscrupulous lenders will knowingly send notice of thirty day late in hopes of lowering the unwary customer’s credit scores so that they could then increase their interest rates), the absence of evidence that a loan was satisfactorily paid in full, continued presence of credit burdens well past their statute of limitations, and sundry other inaccuracies small and large which each negatively impact the FICO credit scores.

Happily, around the same time as that study was published, the United States Congress bowed to extraordinary public pressure and instituted the Fair and Accurate Credit Transaction Act which guarantees all citizens a cost free credit report from each of the three bureaus. As soon as you’ve identified errors within the credit report – and there will most likely be at least a single mistake among all three bureaus, should you look closely enough – it’s up to you to communicate with representatives of the credit agency and voice your belief in what should have been reported. Traditionally, the consumers would craft a letter outlining the disagreement and follow up with telephone calls to the bureaus’ 1-800 numbers, but, with the spreading influence of the internet among all aspects of the credit reporting industry, it’s actually far easier to force corrections from the credit bureaus. In some extreme cases some consumers might need to seek the aide of professional credit counselors in order to make sure all errors are dealt with properly.

Indeed, some of the bureaus ask nothing more from the dissatisfied correspondents than clicking a button that indicates a potential quarrel. As soon as the credit bureau has been notified of the dispute, employees of the agency are legally bound to ask the original lender who’d submitted the questionable entry for some degree of verifiable evidence regarding the supposed delinquency. In this scenario, if the lenders don’t readily provide evidence, the credit bureau will be legally required to omit the item from future reports and recalculate the FICO credit score (which could spike up by three digits in a matter of moments). To be frank, you should keep in mind that the average lender representatives are already up to their necks in abandoned debt balances following the national economic meltdown. Since the legislative mandate outlined in the Fair and Accurate Credit Transaction Act demands prompt responses to all consumer complaints, there’s a better than even chance that genuine delinquencies may fall through the cracks.

Inattentive lender personnel have allowed many Americans to bolster their credit scores, and, should the credit bureau be sent documented evidence of your credit mis-steps, the late notice shall remain but it’s not like the credit score will get any worse because of the attempt. Still, you will want to act with discretion in this matter since credit bureaus will certainly become aware of a multitude of specious complaints from consumers patently trying to tweak the system. Once an account has been frozen and correspondence discontinued due to a succession of groundless complaints, you won’t be able to change the most blatant of errors.

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