Your
credit report can affect your life in many important ways, from
qualifying for a mortgage or automobile loan to finding a job, so
you'll want to make sure it's an accurate reflection of your financial
history.
Mistakes happen
Mistakes
can occur on credit reports: In fact, some studies suggest that as many
as 80% of credit reports contain errors — some minor but some
potentially serious. Experts recommend that you check your credit
report with the three major reporting agencies — TransUnion, Equifax,
and Experian — at least once a year for accuracy.
A new law called the Fair and Accurate Credit Transactions
Act, or FACT Act, ensures that everyone in the country
can request one free annual credit report from each
of the three major credit reporting agencies. Some
experts recommend staggering your free reports — for instance,
ordering one in December, the second in April, and the third in August
— so that you can keep an eye on your credit throughout the year and
spot any suspicious activity early on.
You
should also check your report at least two months before you anticipate
it will be requested — for instance, before you apply for an automobile
or home loan, or a new job. That way, you can notify the credit
reporting agency (CRA) if you find any inaccuracies. The CRA must
investigate the dispute within 30 days. If it can't verify the negative
information, by law it has to be removed from your report. You can then
ask the agency to send the corrected credit report to anyone who has
requested it in the previous six months — and in the previous two years
in the case of prospective employers.
If
you disagree with the CRA's findings, you can write a 100-word
explanation, which must be included in your report — although the
negative information will remain in your report as well.
