Credit Report Errors
by Gary Foreman
What Students Need to Know About 6 Credit Score Myths
Rebuilding Your Credit Score the Right Way
Your Partner's Credit Score
Correcting Your Credit Report
I am correcting an item in my credit report. I requested the report from Equifax. Should I also request (and correct) reports from Experian and Trans Union? I can see a situation where I've corrected it with Equifax, but a lender uses a different agency. Do these companies share information?
Curt is right. It is important for him to have accurate information in his credit report. Negative comments could make a big difference in the interest rate he pays for mortgages, car loans and even his credit card balances. And errors are fairly common. Studies show that 70% of all credit reports contain at least one error.
As a general rule, it's wise to check your credit report before you apply for credit for a major purchase or yearly. Checking one credit reporting agency should be enough unless you've had some problems. But Curt's case is a little more complicated. To answer his question we need to know a little about credit reports and credit rating agencies (CRAs).
As Curt pointed out there are three major credit rating agencies: Equifax, Experian and Trans Union. CRAs are a two-way street for your information. They collect information from member companies about you and put it in your file. For instance, your credit card company and the people who hold your home mortgage will send in a status report on your bill-paying record. Expect that your major accounts will be reported to all three agencies.
The credit reporting agencies also provide information about you to member companies who request it. So if you apply for an auto loan, the prospective lender will contact a CRA to check you out. The lender can choose to use any of the three CRAs to get your history.
So let's look at Curt's case. For illustration, we'll suppose the problem is with the bank that issued his Visa card. He can expect that problem to show up in all three credit reports since the bank will work with all three agencies.
So will correcting one report take care of the others? It all depends on what changes are made to his report. The first thing for Curt is to deal with the creditor. In this case Visa. Curt will need to see if they are willing to change the information that they're reporting to all three agencies.
Perhaps the dispute is over a late payment and Curt can prove that his check was on time. If Visa agrees that the original information was wrong they're required by law to send a correction to any agency that got the original information. And CRAs are required to share any corrections with each other. So, one correction would solve the problem.
What's your FICO® Score? Find out now for $1 with enrollment in Experian.
But suppose that Curt and Visa disagree over whether his payment was late. Visa doesn't believe a correction is necessary. They believe the report is accurate as it stands. Curt is allowed to insert remarks into his credit report presenting his side of the dispute. But, since what's being entered isn't a correction, Curt can't count on the Equifax passing it on to the other agencies. If it's an important dispute, he should send his remarks to all three agencies.
He'll want to contact each CRA to find out the proper format for his remarks. He can find them online at:
If Curt feels either the lender or CRA isn't responding he can report them to the Federal Trade Commission. To register a complaint with the FTC call 1-877-FTC-HELP. Curt shouldn't expect a personal reply. The FTC is only looking for a pattern of abuse. They will not get in the middle of Curt's dispute.
So the key for Curt is whether a correction or remarks about a dispute is entered in his report. A correction should be reflected in all three credit reporting agencies. Remarks would need to be handled separately.
In any case, if Curt is about to borrow money he probably should check all three reports. It doesn't take much time or money. And that's really the only way to make sure that incorrect information isn't costing him extra interest.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
Take the Next Step:
- What's your FICO® Score? Find out now for $1 with enrollment in Experian CreditWorksSM!
- Stop allowing debt to prevent you from doing the things you want. These 6 steps to getting out of debt can solve that problem. Get started today!
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Share your thoughts about this article with the editor.
More Money Tips & Tools
- Use a luxury tax to trick yourself into saving
- How to set up your first 401k
- The 7 P's of paying off your loan early
- Saving-money secrets of the rich and frugal
- 5 low-risk ways to earn higher interest now
- How to save money fast
- 7 IRA withdrawals that don't trigger a penalty
- This week's Readers' Tips