Everything You Need to Fix a Mistake on Your Credit Report

If you are about to make any major purchase, it is important that you make sure your credit report is clean and free of errors first.  You need to make sure your sister’s unpaid school loan is not showing up on your credit report.  You also want to be sure there are no erroneous reports of late payments.  Read on to learn everything you need to know about checking your credit report and correcting errors.

What is in a Credit Score?

There are three main companies that create credit scores and each one uses a different formula.  As a general rule of thumb, you can look at FICO’s formula for credit rating:

Percentage of Score / Factor

• 35%             History of Payments
• 30%             Total Owed to Creditors
• 15%             Credit History Length
• 10%             Total New Credit Amount
• 10%             Kinds of Credit Used

Your credit score can range from 300 to 800 or more.  Scores in the 800’s reflect near perfect credit.  Your credit score is a picture of your credit risk at a specific point in time and can change as your credit history changes. 

Because different credit-reporting agencies use their own formula, and get reports from different creditors, some of your debts and credit may not show up on every report.  This can help or hurt you, depending on the line of credit.  That is why it is important to review your credit report and understand how credit scores are calculated.

Where to get a Copy of Your Credit Report

It is important to check your credit report for errors before making any major financial decisions.  Below is a list of the credit reporting agencies with their contact information:

Equifax

P.O. Box 740256

Atlanta, GA 30374-0256

1-800-685-1111

www.equifax.com

Experian

P.O. Box 2104

Allen, TX 75013-2104

1-888-397-3742

www.experian.com

Trans Union

P.O. Box 1000

Chester, PA 19022

1-800-916-8800

www.transunion.com

FACT (Fair and Accurate Credit Transactions Act) allows you to get a copy of your credit report for free one time each year from each of the major reporting agencies.  These agencies have a centralized way for you to request your credit report.  Order a copy of your report by phone, mail or internet:

Phone:  1-877-322-8228

Mail:  P.O. Box 105281

          Atlanta, GA 30348-5281

Web: www.annualcreditreport.com

Once you have filed your dispute, you also need to contact the lender that filed the erroneous information.  Otherwise, the wrong information will be reported again to the credit agency. After you file the dispute, the credit rating agency has 30 days to investigate your claims. If they cannot find any evidence against you, they must remove the erroneous information from your report. Make sure you get a copy of the paperwork from the credit bureau to the lender, correcting the information, in case the bad information pops up again. 

Once your credit report is sparkling clean, use the information to assess your financial borrowing power. You will know if you can afford a new car or home or if you need to save more for a down payment.