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How to Fix Credit Report Errors that Aren't Yours

The term 'sticker shock' is a pretty common phrase. But have you ever heard about credit rejection shock?

Credit rejection shock can happen when you apply for a new line of credit, like a new credit car or a mortgage, and get a rejection for reasons that you just don't understand. To make matters worse, when you finally look at your credit report, you see that there are entries that you do not recognize and certainly do not agree with.

You may be angry - furious, even - when you experience this. There's no need to panic, though, and there are ways to fix mistakes on your credit report. Mistakes on credit reports are common and you're not alone in needing to fix them. It's important, though, to document the process every step of the way and stay persistent with the credit reporting bureaus and your creditors.

Know Who You're Fighting

Your first step is getting a copy of your credit report from the three main agencies, TransUnion, Experian, and Equifax. You can get your reports online or by calling them. You are also entitled to a free report from the reporting company if you were rejected for something on your credit report.

Each credit report has several sections. The sections cover your personal information, report requests, accounts in good standing, credit items, and items that could be potentially negative.

Analyze each of the three reports and determine what information is accurate. You should be familiar with most of the information on the report. You are looking for any errors. Make a list of items that are errors, questionable, or negative in nature. You should also be looking for any discrepancies between the reports from the three agencies. Doing all this will give you a good point from which to resolve issues and hopefully improve your credit rating.

Document and dispute

There are steps you can take to resolve real mistakes on your credit report.

The credit reporting agencies are responsible for correcting inaccuracies and incomplete information, according to the Fair Credit Reporting Act (FCRA). This policy gives you the responsibility to contact the agencies and correct any inaccuracies that you find.

Writing a Dispute Letter

You'll need to include a clear reason why you are disputing items when you write to the credit bureaus. You also should include any evidence or documents that help support your reasons for disputing the items. Make photocopies of everything, and send everything through registered or certified mail. Doing this will give you a record of what was sent, when, and when it was received.

Do Not Be a Stranger - Keep in Touch

The agency is required to investigate the issue and information within 30 days of receiving your letter. The agency will pass on the dispute to the entity or creditor that gave that information to the credit agency initially. The creditor or provider also must investigate the complaint. They are obligated to report their findings to the credit bureau.

If the agency and creditor decide that you are correct, the change will be made on your report. This will make your report more accurate. If the dispute isn't resolved, however, you may ask to have your dispute statement included with your credit report.

Track the Paper Trail

You need to create an organized system to keep track of the letters and documentation that you send to your creditor and the credit bureaus if you are serious about repairing your bad credit status. You may wish to use some sort of checklist or spreadsheet, whichever works easiest for you. Although this may seem like a lot of work, it will be helpful when you have to make repeated phone calls and write letter after letter. This system will show when you have called or written, whom you talked to, the company's response, and what you have sent. Take careful notes about the date and time of each phone conversation, along with the name of the person representing the company.

You should hold onto this information for a few years after the item is resolved. It's common for items to reappear even after they have been removed.

Accurate but negative items

It is possible to dispute some negative yet accurate items on your report. If you were never notified of the problem, you are entitled to dispute the report, according to the Fair and Accurate Credit Transactions Act of 2003. You handle negative but accurate items in the same way that you handle inaccurate items on your credit report.

Help from the professionals

It's possible to repeat a dispute if you are not satisfied with the action the credit bureaus and your creditors have taken. There is no charge for requesting another investigation.

If you honestly feel as if you have been wronged, however, it may be beneficial to hire an attorney. This is when your paper trail will prove especially invaluable.

Always another day

Don't beat yourself up over your past mistakes, or about having to go through the dispute process. Many people find themselves in this position. You will need to be persistent, but organized and polite. These steps may seem easy, but you must remember that credit bureaus are not always willing to cooperate with you. You need to make your credit report your No. 1 priority and not trust the credit bureaus to take care of it for you.

If you are unsuccessful, you may find some small comfort in knowing that negative marks are removed completely in seven years.