Credit reports are invaluable and help determine an applicant’s character and creditworthiness. The information contained in the report allows you to secure loans, housing, employment, lines of credit, and insurance coverage.
Credit reporting agencies gather and compile financial information on more than 200 million people monthly. They sell the reports to employment agencies and businesses who use the information to determine whether to approve a loan, supply credit, approve housing applications, and obtain insurance.
In the United States, there are three main credit reporting agencies, Experian, Equifax, and TransUnion, and two companies who generate credit scores, VantageScore and the Fair Isaac Corporation (FICO). Credit ratings and scores often vary between the different agencies, largely because not all creditors send monthly financial data to all of them. The credit reporting agencies use the data to determine each consumer’s creditworthiness and assign a score within one of five credit levels:
- Very good.
Your credit score is a significant factor in determining your financial abilities, and the majority of lenders will not approve financing for consumers in the fair and poor categories. Maintaining a good credit rating is important because credit scores also play a role in determining the cost and interest rates you will be required to pay when borrowing money.
Negative information can damage your credit report and make securing financing incredibly difficult, if at all. Credit reports contain negative information,, such as late or delinquent payments, foreclosure, bankruptcy, property repossessions, and lawsuits. Much of this information remains on your credit report for up to seven years.
Negative information can appear on your credit report that is incorrect or misleading. An individual’s score can be severely damaged by negative incorrect information. Common errors in credit reports include:
- Incorrect information regarding your identity, such as the wrong name, social security number, address, or phone, among others.
- Accounts belonging to others with a similar or same name.
- Incorrect accounts due to identity theft.
- Accounts that are closed still reported as being open.
- Incorrectly identified as the owner of an account rather than an authorized administrator.
- Current accounts that are reported as late or delinquent .
- Incorrect dates on accounts, such as the date opened, date of last payment, or first date of delinquency.
- Multiple listings of the same debt, sometimes caused by a different name on the account.
- Reinstating incorrect information after previously correcting it.
- Multiple listings of the same account, but with different creditors. Most commonly on accounts that are delinquent or in collections.
- Incorrect balances or credit limits on accounts.
- Old and outdated information that is no longer relevant.
Four types of credit report errors can cause significant consequences and severe damage to your credit report.
If a creditor reports an account as being associated with a deceased individual, it can wreak havoc in many areas of your life. When this is reported on your credit report, you cannot open a bank account, get a job, obtain or renew a driver’s license, obtain health insurance, secure housing, and more until the information is corrected.
Incorrect Criminal Background Checks
Misleading or incorrect information reported on a criminal background check can be incredibly damaging. This happens most frequently when information is blended with someone else’s with a similar or same name or uses outdated information.
One of the fastest ways your credit report can be damaged happens when your identity is stolen and accounts are open in your name by using your information. Thieves often open multiple accounts and use them rapidly before being caught, racking up bills in your name, which go unpaid and are reported delinquent or in collections.
Fixing a credit report due to identity theft is a frustrating and time-consuming process, which often causes some negative information to be included for long periods, further damaging your credit and score.
Credit reports containing an incorrect Office of Foreign Assets Control (OFAC) alert can have devastating consequences. An OFAC alert is placed on credit reports when a name matching one on the U.S Department of Treasury’s Specially Designated Nationals (SDN) list. The SDN lists names of suspected terrorists, drug traffickers, money launderers, and those not legally permitted to do business in the U.S.
Can I Have My Credit Report Corrected?
Under the Fair Credit Reporting Act (FRCA), credit reporting agencies are required to gather and distribute information that is fair and accurate and correct any negative information that is found to be false. This law also pertains to financial lenders, banks, credit unions, and agencies who sell medical records, check-writing histories, and businesses who use credit reports as part of the hiring process.
The FRCA protects consumers, granting the right for individuals to dispute incorrect information in credit reports. Disputing incorrect information is a multi-step process that often requires some time to complete, so it is best to start the process as soon as you discover the errors, as the negative information will continue to be reported until it is corrected.
In order to dispute items in your credit report you will need to gather supporting documents to submit with the dispute, such as:
- A copy of the credit report with the incorrect information highlighted or circled.
- Credit card statements, loan documents, and bank statements.
- Documents providing evidence of birth, death, or divorce, Social Security number, and date of birth.
- A police report or Federal Trade Commission (FTC) complaint in cases of identity theft.
- Proof of identification through government-issued identification, such as a driver’s license or passport, along with your birthdate and Social Security number.
- Current and past addresses for at least the previous two years, and a utility bill, insurance documents, or bank statements confirming your name and address.
Prepare a written letter for the credit agency, explaining what information in your credit report is incorrect, why you are disputing the information, the included supplemental information, and request the correction. If all three agencies are reporting the incorrect information, send the same items to all three agencies. Sending your packet by certified mail is recommended to retain proof the package was received.
How Long Does the Investigation Take?
Once the credit agency receives your dispute package, they are required by law to investigate and report the findings within 30 days at no cost to you. The agencies will also inform the businesses who supplied the incorrect information of the dispute and alert them to the pending investigation.
If the investigation reveals that the information is in fact incorrect, the credit reporting agencies and businesses are required to correct it, provide the results to you in writing, and provide you with a courtesy copy of your corrected credit report. The agencies must also provide notices of the corrected information to all those who reviewed your credit report during the past six months, such as a lender, and the past two years for those who utilized the report for hiring purposes.
Should the investigation find that the dispute has no merit, you can request to have a statement included in your report noting that you disputed the information and subsequent investigation for those who review the report.
Consumers are entitled to one free credit report per year from each of the three credit bureaus, and each one offers paid subscriptions for anytime access to your report. Regularly checking your credit report helps identify any signs of identity theft or incorrect information.
Pittsburgh Credit Report Attorneys at East End Trial Group Assist Clients Disputing Incorrect Information on Their Credit Reports
Incorrect or misleading information on your credit report can have a damaging and long-lasting impact on your ability to secure loans, housing, and can prevent you from getting employment opportunities. If you believe information in your credit report is incorrect, one of our experienced Pittsburgh credit report attorneys at East End Trial Group can guide you through the process of having it corrected. Call us at 412-223-5740 or contact us online for a free consultation. Located in Pittsburgh, we serve clients throughout Pennsylvania.