Credit Report Disputes – How to deal with them

A credit report, which is a kind of consumer report, provides financial transactions of an individual along with his payment history. Consumer reporting agencies (CRAs), which are also known as credit bureaus, gather the credit information of individuals and compile a credit report. They sell credit reports to various businesses that require this information to assess applications from individuals for credit, employment or insurance. There are 3 major credit reporting bureaus, Equifax, Experian and TransUnion, which collect financial information about individuals from various creditors, business owners and banks. The credit reporting reform act has been exclusively devised by the Federal Trade Commission to protect the information contained in credit reports and also to ensure accuracy. The credit reporting reform act makes it mandatory for these bureaus to provide an annual free credit report, which can be used by individuals to compare and contrast and check for any possible discrepancies or disputes in any of the credit reports. In fact, financial experts recommend periodic reviewing of credit reports to ensure timely rectification.

In case a financial institution or any other organization refuses to consider your application for credit or insurance or any other similar request on the basis of your credit report, the credit reporting reform act entitles you to know the name of the CRA that furnished them the report. If you come across a dispute in the credit report, it is advisable to write a dispute letter to the concerned credit reporting agencies requesting them to make the necessary corrections. This letter should include all the details regarding the incorrect entry or omission. Any documents that can support the dispute can also be attached along with the letter. Prior to sending this letter, it is recommended to make copies of all the correspondence. Since the dispute can also be the result of possible negligence on part of the concerned creditor or organization that issued a bad record, the dispute needs to be brought to their notice as well. As per the credit reporting reform act, the Credit bureaus are then required to reinvestigate the disputed entries and after verification delete the wrong entries from your credit report. The concerned credit bureau also informs other CRAs regarding the changes made in the applicant’s credit report.

With an alarming rise in identity thefts, it has become crucial for all individuals review their credit reports regularly. You can place an order online or through the toll free telephone number for credit reports from any of the credit bureaus.