Checking and Correcting Your Credit Report

With identity theft on the rise, it’s a good idea to check your credit report at least once a year and certainly in advance of applying for a mortgage or loan. This will enable you to address any errors before they wreak havoc on your financial life, suggests the California Society of CPAs (www.calcpa.org).

Getting Copies of Your Credit Reports Is Easy
As of Dec. 1, 2004, residents of 13 Western states, including California, can get a free copy of their credit report from all three national credit bureaus by calling (877) 322-8228, going to https://www.annualcreditreport.com, or by filling out a form and sending it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. (Residents of other states will be gradually phased in during the coming year.)

You may request a free report from just one of the bureaus or from all three through the Annual Credit Report Request Service. If you need a copy at another time, you may have to pay for it, and you will need to contact the credit bureaus directly.

You should get a report from all three major credit agencies because they might contain different information. You can request a copy of your credit report by directly contacting the three national credit bureaus: Equifax (800-685-1111), Experian (888-397-3742), and TransUnion (800-916-8800). The Web sites for each agency allow you to order your report online.

The cost is generally $10 per report, but in some circumstances, the report is free. For example, if you applied for a loan and were turned down, you are entitled to a free copy of your credit report, as long as you make your request within the specified time. You can also get a free report if you are unemployed, receiving public assistance, or believe your credit file contains mistakes resulting from fraud.

There are online sources that will provide you copies of your report from all three agencies for one fee. The report format from each agency varies, but with each report you also receive a legend or key that explains what the various letter and number codes mean.

Here’s What to Look for When Reviewing Your Credit Report
Begin by verifying the accuracy of the report’s identifying information such as your name, Social Security number, current and previous addresses, date of birth and employment history.

The main section of your report contains credit information about your accounts with banks, retailers, credit card issuers and other lenders. The credit information section typically includes the account opening date, your credit limit or loan amount, outstanding balance, monthly payment, and payment record over the past several years. Your report will also reflect delinquent accounts that are referred to a collection agency.

Another section of the report includes public record information such as bankruptcy records, monetary judgments and tax liens. Inquiries or the names of those who requested a copy of your credit report over the past year will also be identified.

Positive information remains on your report indefinitely. Most negative information remains for up to seven years, and bankruptcies remain on your credit report for up to ten years.

Follow These Steps to Correct Errors
Be sure to go through the entire report, entry by entry. You have the right to dispute any information in your report you feel is false, incomplete or obsolete. Inform both the credit bureau and the creditor who reported it of any errors.

You can file a dispute online, by phone or in writing. A letter should include your complete name, address, date of birth and Social Security number, in addition to details concerning the disputed information. Send your request via certified mail, return receipt requested. Once you challenge any information, the credit bureau is required to contact the creditor and request that the creditor verify the information.

If you disagree with the findings, you can file a short 100-word or less statement giving your side of the story. Future reports to creditors must include this statement or a summary of it.

Don’t Fall for Credit Repair Scams
CPAs caution that there is no quick fix for repairing your credit record. Don’t believe anyone who tells you otherwise. Only time, effort and an effective personal debt repayment plan will improve your credit report.