How to improve your credit report
- By Milt x_Zall
- May 10, 2002
Last week's column "Building
a better credit record" began a four-part look at handling your credit
report. It outlined what is contained in a report and your rights regarding
This week, part two in the series, will show you how to correct information
in your credit report:
Correcting Your Credit
Under the law, credit reporting agencies (CRAs) and the organizations
that provide the information to them, such as a bank or credit card company,
are responsible for correcting inaccurate or incomplete information in your
report. To protect all your rights under the law, contact both the CRA and
the information provider if you have a dispute.
First, tell the CRA in writing what information you believe is inaccurate.
Include 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, state the facts and
explain why you dispute the information, and request deletion or correction.
You may want to enclose a copy of your report with the items in question
Your letter may look something like the one below. Send your letter
by certified mail, return receipt requested, so you can document what the
CRA received. Keep copies of your dispute letter and enclosures.
Sample Dispute Letter
Your city, state and ZIP code
Name of credit reporting agency
City, state and 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.
This item (identify disputed item by name of source, such as creditors
or tax court, and identify type of item, such as credit account, judgment,
etc.) 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.
(Use the following sentence if applicable.) Enclosed are copies of (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.
Enclosures: (List what you are enclosing)
What Happens Next
CRAs must reinvestigate the item(s) in question usually within 30
days unless they consider your dispute frivolous. They also must forward
all relevant data you provide about the dispute to the information provider.
After the information provider receives notice of a dispute from the
CRA, it must investigate, review all relevant information provided by the
CRA, and report the results to the CRA. If the information provider finds
the disputed information to be inaccurate, it must notify all nationwide
CRAs so that they can correct this information in your file.
Disputed information that cannot be verified must be deleted from your
If your report contains inaccurate information, the CRA must correct
If an item is incomplete, the CRA must complete it. For example, if
your file showed that you were late making payments, but failed to show
that you were no longer delinquent, the CRA must show that your payments
are now current.
If your file shows an account that belongs only to another person, the
CRA must delete it.
When the reinvestigation is complete, the CRA must give you the written
results and a free copy of your report if the dispute results in a change.
If an item is changed or removed, the CRA cannot put the disputed information
back in your file unless the information provider verifies its accuracy
and completeness, and the CRA gives you a written notice of its intent to
reinsert the items that includes the name, address, and phone number of
If you request, the CRA must send notices of any correction to anyone
who received your report in the past six months. You can have a corrected
copy of your report sent to anyone who received a copy during the past two
years for employment purposes. If a reinvestigation does not resolve your
dispute, ask the CRA to include your statement of the dispute in your file
and in future reports.
In addition to writing to the CRA, you should tell the creditor or other
information provider in writing that you dispute an item. Be sure to include
copies (not originals) of documents that support your position. Many providers
specify an address for disputes. If the provider continues to report the
disputed item to any CRA after receiving your notice, it must include a
notice that you dispute the item. If you are correct that is, if the
information is not accurate the information provider may not report it
Accurate Negative Information
When negative information in your report is accurate, only the passage
of time can assure its removal. Accurate negative information generally
can stay on your report for seven years. There are certain exceptions:
* Bankruptcy information may be reported for 10 years.
* Credit information reported in response to an application for a job
with a salary of more than $75,000 has no time limit.
* Information about criminal convictions has no time limit.
* Credit information reported because of an application for more than
$150,000 worth of credit or life insurance has no time limit.
* Default information concerning U.S. government-insured or -guaranteed
student loans can be reported for seven years after certain guarantor actions.
* Information about a lawsuit or an unpaid judgment against you can
be reported for seven years or until the statute of limitations runs out,
whichever is longer.
Seven-Year Reporting Period
There is a standard method for calculating the seven-year reporting
period. Generally, the period runs from the date that the event took place.
With regard to any delinquent account placed for collection internally
or by referral to a third-party debt collector, whichever is earlier
charged to profit and loss, or subjected to any similar action, the seven-year
period is calculated from the date of the delinquency that occurred immediately
before the collection activity, charge to profit and loss, or similar action.
For example, assume that your payments on a loan were late in January, but
that you caught up in February. You were late again in May, but caught up
in July. You were again late in September, but did not catch up before the
account was turned over to a collection agency in December. You made no
more payments on the account, and it is charged to profit and loss in July
of the following year.
Under the Fair Credit Reporting Act, the January and May late payments
each can be reported for seven years. The collection activity and the charge
to profit and loss can be reported for seven years from the date of the
September payment, which was the delinquency that occurred immediately before
Adding Accounts to Your File
Your credit file may not reflect all 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 CRAs:
Some travel, entertainment, gasoline card companies, local retailers and
credit unions are among the creditors that don't.
If you've been told that you were denied credit because of an "insufficient
credit file" or "no credit file" and you have accounts with creditors that
don't appear in your credit file, ask the CRA to add this information to
future reports. Although they are not required to do so, many CRAs will
add verifiable accounts for a fee. However, understand that if these creditors
do not report to the CRA on a regular basis, the added items will not be
updated in your file.
Dealing with debt.
Zall, Bureaucratus columnist and a retired federal employee, is a freelance
writer based in Silver Spring, Md. He specializes in taxes, investing, business
and government workplace issues. He is a certified internal auditor and
a registered investment adviser. He can be reached at email@example.com.