We’ve written many times about how and where to get your free annual credit report. Now, here’s why you should. An eight year Federal Trade Commission (FTC) report released recently found that one in four—40 million—consumers had an error in at least one of their credit reports. Five percent of those consumers were paying higher interest rates on mortgages, auto loans, and higher insurance premiums. That may not sound like a big deal, but looking at an example might put things in perspective.
If you buy a new car for $26,000, at today’s interest rates, a borrower would save over $2,000 on a 4 year loan just by having a 660 credit score instead of a 650. On a mortgage the same borrower would save $23,000 on the average 30-year fixed rate mortgage of $172,000. So, these credit report errors are costing consumers billions of dollars in overpayments on loans.
So, let’s say you find an error on your credit report. What should you do? You can file your dispute at
Experian, www.experian.com, P.O. Box 9530, Allen, TX 75013, 866 200 6020
Equifax, www.equifax.com, P.O. Box 740256, Atlanta, GA 30374, phone number provided on your credit report (the phone number changes monthly)
TransUnion, www.transunion.com, P.O. Box 6790, Fullerton, CA 92834, or P.O. Box 2000, Chester, PA, 19022-2000, 800-916-8800
The FTC has a sample dispute letter at www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports. In addition, the FTC suggests sending a copy of your credit report with the errors circled. If you send your dispute through U.S. Mail, the FTC recommends sending it certified with return receipt requested, so you have a record of when the credit bureau received your dispute. Also, keep copies of all paperwork and emails.
Credit bureaus must investigate your disputed information within 30 days in most cases. They are also required to send copies of information you provide to the organization or company that supplied the information you are disputing. That organization or company must investigate and report back to the credit bureau; if it finds that the information is incorrect, it must notify all three credit bureaus so they can correct the error in your file. The credit bureau must give you the results of the investigation in writing and a free copy of your report if your report is changed as a result.
According to the FTC, you should also send your dispute letter to the organization or company that provided the information you are disputing and include copies of supporting documents. If that organization or company reports the item to a credit bureau, it must include a notice of your dispute. If the information is found to be inaccurate, the organization or company may not report it again.
For more information you can trust on your credit report and score, see