Occasionally, things slide. Like, for instance, this column, which was due in my editor's inbox yesterday. Thankfully this blunder will not turn up on my credit report. But other indiscretions -- such as that credit card bill that hid in the bottom of my purse for 30 days in June 1998 -- can leave a mark. That one will finally be wiped from my record next year.
There are two kinds of credit report blunders -- information that's outright inaccurate and boo-boos that reflect the errors of your ways. There's no denying self-inflicted credit record wounds (though you can try, and you might be successful if you catch the credit reporting agency on a good day). But what do you do when First Bank of Firstness is reporting lies to potential lenders?
As I pointed out last week, there's a pretty good chance that your credit report is not a 100% accurate reflection of your money-handling history. The severity of the slipups can range from the rather innocent (such as misspelling your name) to the extreme (one Detroit man was notified by his lender that he was being reported as dead). Most inaccuracies fall in the rather mundane category of "late payments," which you'll find described as 30, 60, or 90 days past due.
When your punctuality is wrongly called into question, there's only one thing to do: Clear your good name. If you're lucky, it will take only one phone call and one letter to set the record straight.
Dear Lender: You Are Wrong
When you find inaccurately reported information on your credit report, you can dispute it with the credit reporting agency or go straight to your friendly misinformed lender. You'll probably be best served by dealing with the latter, because the bureaus report only what they are given by your creditors.
Your fact-finding mission includes two steps:
1. Call the creditor who's reporting incorrect information and get the full name, job title, department name, telephone number, and address of the person who is charged with handling your dispute. Be polite, if only to earn a few karma points.
2. Gather proof. You'll need to verify your claim of inaccurate information. Proof is anything from canceled payment checks to past billing statements. If your statement filing system isn't up to snuff, you'll need to get past account statements to support your claim. Lucky for you, the Fair Credit Billing Act requires the creditor to keep your past statements on file so that you can access them. Yes, you'll probably have to pay for it. Call the billing or records department of your creditor and ask for what you need.
Now it's time to compose your "Dear Lender" letter.
If the information you are disputing is truly inaccurate or incomplete, almost all of the inaccuracies can be corrected with a single letter. Compose a brief note describing the mistake you've found and request that the item be corrected. Enclose copies of any supporting documentation. Use any leverage you might have as an ongoing customer of the offending business. Here's a sample letter based on one found at creditinsiders.com:
Your City, State, Zip Code
Social Security Number
Name of Creditor
City, State, Zip Code
Dear [contact name]:
I am writing to dispute the following information that you have been reporting to [name of credit reporting agency]. [List the inaccuracies.]
This item 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.
Enclosed are copies of [use this sentence if applicable and describe any enclosed documentation, such as payment records or court documents] supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible. I also request that you notify each of the consumer reporting agencies you report to that this particular notation is in dispute.
Enclosures: (List what you are enclosing)
If your dispute results in a change to your credit report, the credit bureau will give you the written results and a free copy of your report. While this marks the end of most disputes, be aware that the information can show up again. That will occur only if the creditor verifies the disputed item's accuracy and completeness. If that happens, you'll receive notice from the credit bureau, and you can take it from there. Again.
What if the error is not resolved within 30 days? It's time to break out the legal eagle dictionary and a little attitude. Make it clear that you know the Fair Credit Reporting Act laws and are serious about your wishes. (For some bedtime reading, print out the document and highlight the juicy parts.) This will require another phone call, and, again, please be civil. Call your lender and get the name of someone in its legal department. Send your letter to the company's lawyers and your original contact in the disputes department. Here's a sample lawyered-up note penned by a longtime Fool:
Your City, State, Zip Code
Social Security Number
Name of Creditor
City, State, Zip Code
I am formally requesting that you validate all tradeline notations you have submitted to the three major credit reporting agencies by [name of original creditor] for me, [your name], for account number XXXXXXXXX.
Due to possible inaccuracies in these credit reporting agency reports, I must demand that the validation I hereby lawfully request be in the form of a notarized statement by a person with original knowledge of the debt as it was constituted and who can testify that the debt was incurred legally, was not subsequently disputed as a result of returned, faulty, or recalled consumer products, was not utilized as a profit-loss tax deduction during the period it may have been payable, and was not claimed as a loss with any insuring entity during the period it may have been payable. Please be advised that I am not requesting a verification that you have my mailing address; rather, I am requesting validation, i.e., competent evidence that I had some contractual obligation sans consumer protection encumbrance which incurred the original claims associated with this tradeline.
I have enclosed two documents which will verify my address: a photocopy of a [your state] driver's license and a photocopy of a recent [name of utility or telephone company] statement.
Please know that you have 30 days from the tracked and confirmed delivery of this lawful notice to either answer these demands or to remove the associated negative tradeline notations from the CRA reports. Any other action may constitute evidence of your intent to abridge one or more civil or other constitutional rights. Please be further advised that continued unsubstantiated reporting of possible inaccuracies to third parties may provide a basis for criminal complaints being filed in accordance with FDCPA, FCRA, and other federal statutes.
I look forward to a timely and amicable resolution to this matter.
Enclosures [list enclosures, same as first letter.]
CC - [Legal contact]
I haven't got a clue what half of that means, either. But apparently it gets the job done.
If your creditors disagree with your claim, they will likely explain why the information is accurate. Either they will be correct in their explanation (and you just have a really bad memory), or they somehow misunderstood your dispute, in which case another letter may be necessary.
Hopefully one of the letters to your original creditor, along with your proper documentation, will settle any disputes of inaccurate information. In the event they don't, however, you may need to actually pursue legal action. (Your state's attorney general's office can help you locate a lawyer who will advise you on taking a creditor to court.)
If you are unsuccessful in removing information from your credit file and reach an impasse, you always have the legal right to attach a letter of explanation to your credit file. Be sure to cover all three of the major credit bureaus as well as the offending business. The business is obligated to include your letter in any future input to the credit bureaus. Verify that it does.
And remember, it could be worse. At least your lender knows (and reports) you're alive.
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