Put four adults in a room and chances are that one of them will have a credit report with a serious error.
The big three credit bureaus -- Equifax, Experian and TransUnion -- process huge amounts of information. A 2004 study found that 25 percent of the credit reports surveyed had errors that were serious enough to cause consumers to be denied credit.
Usually, consumers find out about errors in their credit reports after they're denied credit. To fix mistakes in your credit report, here's what to do:
1. Prepare for legal battle.
2. Write it down as it happens.
3. Act businesslike.
4. Know who to contact.
5. Mail it.
6. Confirm it.
7. Apply other tactics.
Prepare for legal battle
Psyche yourself into the proper frame of mind -- a litigious one. Don't file a lawsuit right off the bat, but everything you do should be done with the aim of impressing a judge and jury if your mess gets that far.
It probably won't get that far. But you never know what it will take to clear up your credit record. In most cases, a phone call or two will do. Or you could end up in a multiyear ordeal ending up in federal court. In modern America, your credit report is your reputation, and there's nothing wrong with going to court to clear your name.
Because you don't know how far this dispute will take you, act as if your first effort to correct an inaccuracy is the first salvo in a legal war. That means you should document everything as it happens, and always act businesslike.
Write it down as it happens
Keep copious, detailed records as events unfold. That will impress a courtroom. Even if you don't sue, you can wield your meticulous record-keeping as a weapon ("Well, Mr. Smith, I talked with Jane Doe in the customer-service department, Work Team 97, at 2:55 p.m. on April 25, and she said ... ").
If you can show that you wrote your records as events occurred, they will be considered more trustworthy.
"Keep track of it in a phone log, in a daybook or a diary," says Denise Richardson, a consumer advocate who fields hundreds of e-mail from victims of inaccurate credit reporting and has lobbied members of Congress. "It doesn't stop inaccurate credit reporting, but it's allowed in court if it has to go that far. It's a record that's taken at the time things are happening, and a court won't call it hearsay."
In other words, if you wait a few weeks and then write down an account of the calls you made and letters you sent as you can best remember, a court might weigh that evidence as if it were hearsay -- a rumor, basically.
Imagine suing a company for fouling up your credit record because of faulty record-keeping. Then imagine describing to a jury the tiniest details of every phone call and letter you sent and received as part of the dispute, while your adversary fumbles around with incomplete documentation. Smells like victory.
"Resist the temptation to scream and yell and do things that would not look good in court," says Greg Fisher, a self-described "new breed of rogue Internet journalist" who runs The Credit Scoring Site and the related creditaccuracy.com.
Fisher says that you don't want your opponent to testify that you were belligerent. "'The consumer was incorrigible' -- which I think is the term they use," Fisher says.
Remember: You never know if your problem is going to become so intractable that you have to file a lawsuit, so from the get-go, everything you do has to look good to a judge and jury.
"Imagine having to explain your actions, be they in a letter or in a telephone conversation you had," Fisher says. "You never want to put yourself in a situation where you're not businesslike."
So, no screaming. No pounding a shoe on a table. No threats. Don't refuse to give information, such as account or Social Security number, to someone who is trying to correct your credit record. Never threaten to file a lawsuit unless you intend to follow through. Leave it to your attorney to threaten a lawsuit.
Of course, there's another reason to act businesslike: Remember what your mom said about attracting more flies with honey than with vinegar?
Know who to contact
Useful phone numbers|
Most people who have had to correct credit reports will tell you that you need to notify not only the bureau that publishes your credit report, but the company that is furnishing incorrect information. Fisher disagrees with that tactic.
"You're not disputing what the creditor is reporting; you're disputing what the credit reporting agency is reporting to the world -- the rumor mill," Fisher says. He explains that the Fair Credit Reporting Act requires credit bureaus to make corrections; it doesn't require creditors to make corrections.
In practical terms, though, people find that it's more efficient to order the creditor to correct the misinformation it is sending to the credit bureau, and at the same time tell the credit bureau to update the credit report with the corrected information.
Sometimes, the only solution is to contact a creditor. Brian, who requested we withhold his last name, got a secured credit card so he could improve his credit record. The whole point of getting the card was to pay on time and get that positive information posted to his credit report. Then he found out that the card issuer wasn't reporting his sterling payment record with all the credit bureaus. He had to prod the card issuer to report the positive information; it wouldn't have done any good to complain first to the credit bureaus.
How to contact your adversaries? The phone is fine, but the certified letter is better. Consumer protection laws require you to notify credit bureaus in writing of any inaccuracies they report.
"First of all, I would send the creditor a certified letter disputing the inaccuracies and send a copy to the credit bureau, with any pertinent documents to prove that it's inaccurate," Richardson says.
It doesn't hurt to call on the phone, but you should back up each conversation with a certified letter summarizing the call, Richardson says. Send it to the person you talked to and send a copy to the credit bureau.
Just remember that the certified letter isn't a substitute for the phone records you should keep. Keep those phone logs and your notes and your certified letters together in a file.
When you're on the phone, pry. Ask for the first and last name of the person you're talking to, the name of the supervisor, and find out the exact name of the department. Get the mailing address. At credit bureaus such as Equifax, the people you talk with work in teams, so ask for the team number of the person you're talking to.
You need to be meticulous for a couple of reasons. First, call centers tend to have high turnover, so knowing the team number and supervisor's name will help you get on the right track if the person who you've been dealing with suddenly leaves or if the problem isn't corrected quickly. And if you file a lawsuit, your copious information will help you establish your case.
"If you get a creditor on the other line saying, 'Yes, I'll correct it,' say, 'Will you send me something confirming that?'" Richardson says.
You want a copy of the UDF, or universal data form. It's a document that your creditor transmits to the credit bureaus to update your report. It tells the credit bureau what sort of change is being made: a balance update, a payment history change, an update of current status, or deletion because of error or some other reason.
If the creditor won't send a UDF, ask for a letter confirming that the creditor notified the credit bureau of the inaccuracy and requested a correction.
Richardson advises going even further. Some credit card issuers will raise your interest rate if they discover that you've been late in paying a bill to someone else. So if a company is reporting inaccurately that you were late paying your bills, Richardson says you should have that company mail a UDF not only to you, but to all your other creditors.
Apply other tactics
Fisher is a fan of going by the book and then beyond it. He suggests these tactics:
- Chronicle the case on a Web site. There are lots of free Web sites around; post information about the dispute in excruciating detail. Then notify the credit bureau of what you've done. Fisher knows of at least one case where this tactic yielded results the next day.
- Hire a credit repair company. "You can do it yourself, yes, but you can also do your own plumbing, too," Fisher says.
- Never write a letter "To whom it may concern." Always write to a real human being. If you don't get results, work up the chain of command, all the way to the board of directors.
- Call a reporter. You could contact your newspaper. You could e-mail me if things have become so bad that you've filed a lawsuit. Fisher welcomes e-mails, too.
- Go to a search engine and find some names of executives at the credit bureau. Each time you write to the bureau, send copies to twice the number of people who you sent copies to before.
- Write to the Federal Trade Commission. "They want evidence, hard evidence, of wrongdoing by the credit reporting agencies," Fisher says.