Accuracy of Credit Reports

Credit reports are used to verify a person’s qualification for credit, employment, insurance and housing rental.

Unfortunately, errors can occur in credit reports. These can be caused by identity theft or by a mistake in encoding. These errors can be very costly and may cause denial in attaining certain benefits.

Rules and Guidelines

The US Federal Trade Commission has announced rules and guidelines that promote the accuracy and integrity of information provided to credit reporting agencies. The guideline specifies that information provided by financial institutions and furnishers to credit reporting agencies should not mislead or create a misleading impression about a consumer’s creditworthiness. This also means that furnishers must include the consumer’s credit limit in the information they will provide the credit reporting agency. They also give consumers the right to dispute errors in their credit reports directly with the furnishers or financial institutions besides disputing these errors with the credit reporting agency.

There are companies who provide credit monitoring aside from the usual credit reporting, and they will alert a client if there is any change. A person can save a lot of money from monthly fees these companies will charge for these services that a consumer can do on their own.

An excellent way to monitor your credit is to get a report every four months. Federal Law permits a person to one free credit report from the three major credit bureaus – TransUnion, Equifax and Experian. For example acquire a credit report from TransUnion on January, another report from Equifax on May, a report from Experian in September, and do the whole cycle again for the following year. Make sure to go the government’s official website for the free credit reports at http://www.annualcreditreport.com, because there are a lot of sites that offer “free” credit reports but will actually automatically enroll you in a paid credit monitoring service.

Accuracy of Credit Reports

After getting your credit report, examine the reports closely, make sure they are accurate. There may be errors in the report that financial institutions can see but you do not unless you examine them.

If there are errors, you can dispute the credit report. A dispute form is always provided with the credit report. You can also write the credit reporting agency or the furnishers of the information through certified or registered mail. Include all the pertinent information and documentation regarding the error. The credit bureau must investigate any significant dispute within 30 days.