How do I read my credit report?
First, review your name and the spelling to check for any errors or misspellings. Name errors can result in someone else's information appearing on your credit report. Second, check your Social Security number, date of birth and address for any errors. Sometimes employees of credit bureaus, creditors and data entry personnel make mistakes, such as transposing numbers. After careful review, follow instructions from the reporting agency on how to read your credit history.
How can I dispute the information in my credit report?
Make a note of any items that you believe to be wrong, outdated or inaccurate.
A dispute form comes with the credit report. Use it to list any items that you feel are incorrect. By filling it out and returning it you are requesting a reinvestigation into your file.
Under the federal Fair Credit Reporting Act (FCRA), the credit bureau you submitted your dispute to has 30 days from the date it receives your letter to conduct its investigation. This 30-day period can be extended to 45 days if the agency feels you didn't provide enough documentation to support your dispute. If the credit bureau can no longer verify the debt, or it is outdated, the bureau must immediately remove those items from your report. Within five days after completing the investigation the credit bureau must inform you in writing of the results, which should include a new credit report reflecting any deletions, changes or insertions. Be advised: if a creditor later verifies the debt, the credit bureau will reinsert the information.
If the credit bureau decides not to investigate your file because it considers the dispute "frivolous and irrelevant," it must inform you within five days of this decision. At this point you have the right to add a 100-word statement to your report, which gives you the opportunity to explain any negative information in your file.
How long does negative information stay on my credit report?
Negative information stays on your report no more than seven years from the original date of delinquency. Negative information can be: unpaid debts, charge-offs, late payments, judgments, liens, excessive revolving credit (too many credit cards) and bankruptcies. Bankruptcies can stay on your report for up to 10 years. If your debt is turned over to an outside collection agency and it reports the debt to credit bureaus, that same debt will be reported twice on your report. The negative mark from the collection agency will also stay on your report for seven years. Inquiries from potential creditors stay on your report for one year. Too many inquiries may also be viewed as negative.
Note: If you apply for certain jobs with a salary above $75,000, or apply for insurance or loans over $150,000, all negatives will be seen, even if they are more than seven years old.
How can I file a complaint against a credit bureau?
If you believe a credit bureau is not complying with the FCRA, you should report it to the Federal Trade Commission, Division of Credit Practices, 901 Market St. #570, San Francisco, CA 94103 or call (415) 356-5270. In Southern California, contact the Federal Trade Commission, Division of Credit Practices, 11000 Wilshire Blvd., Suite 13209, Los Angeles, CA 90024, (310) 235-4000.
Can I trust a credit repair firm to help rebuild my credit?
Companies that claim they can repair your credit advertise on TV, in newspapers, with flyers and on the Internet. These companies "guarantee" to fix your credit for a fee. Save your money--only time, discipline and patience will repair damaged credit.
At worst, credit repair companies may illegally offer you a new credit identity. This is done with forged documents. You are breaking the law if you use a false credit history.
Credit repair companies charge you for things that you can do yourself for free. You can dispute errors in your credit report or apply for a secured credit card on your own. If you need help negotiating with a creditor you can get help from a nonprofit agency such as Consumer Credit Counseling Service.
Sometimes credit repair firms are outright frauds. They take your money and run. Protect yourself: ignore credit repair offers!
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