Main Reporting Agencies: There are three main, national, consumer credit reporting agencies (CRAs): Experian Information Solutions, Inc., Equifax Information Services, LLC, and Trans Union LLC (the "Big Three").
How CRAs Get Information: Experian, Equifax and Trans Union all collect information from court records, banks, credit card companies, finance companies, department stores, cellular phone companies, court records, and many other companies issuing credit. The Big Three do not necessarily have the same credit information because not all creditors send reports to all three agencies and the agencies do not all collect information from the same public records. One CRA may have incomplete information, for instance reflecting a tax lien but not the amount or the fact that it was released. Another might not even report the first lien.
Credit Report Is Changing: A credit report is not a paper file kept in one place at a credit reporting bureau. This is part of the reason correcting credit errors can be so frustrating. The credit reporting bureaus have all your information saved in a particular format in a big, interconnected database. Your information is maintained with everyone else's. When a credit reporting bureau receives information from creditors and others, it all goes into one big "vat" of information or a few different vats owned by affiliated companies.
When a business inquires into or "pulls" your credit report, a search program or algorithm pulls information from this vat based on your "personal identifiers" such as your name, address, date of birth and social security number. It is kind of like an internet search engine algorithm, except of course the credit reporting algorithm should be very selective in what it includes. The search algorithm is supposed to filter out obsolete credit information and credit information that doesn't belong to you. The remaining information is combined into one report. Your credit report isn't something fixed since the information used to create your credit report is constantly changing as creditors pour information into the vat.
Get A Copy Of Your Report: Consumers may obtain a free copy of their consumer report online once every 12 months. Simply go to www.annualcreditreport.com and request your complimentary Equifax, Experian and Trans Union profiles.
You are also entitled to a free report within 60 days of credit denial. The agency on which denial is based will be mentioned in the notice.
When you get your credit report the credit reporting agency may include a pamphlet or similar paperwork explaining how to read their particular format. There are generally five sections as follows:
Identification Information: This section usually includes your name, address, social security number, date of birth, former addresses, your employer's name, your job description and possibly your home phone number.
Credit History: This section shows various accounts and how timely you paid on them. There are two main types of accounts you see under "credit history." The first is revolving credit - meaning the minimum amount owed may be definite, but the payment due each month can be variable. This is typical of credit cards. Second is "installment accounts" - a definite amount due in fixed installments. A mortgage payment is typical of these, as are student loans. Underneath the accounts, it may reflect how and when payments were made on them. The credit bureaus break-down the account if there are late payments to show how many payments are 30, 60, 90 and 120 days past due (and some indicate later past dues of 150 days). Thus (3)(30), (2)(60), (1)(90) means you have paid three times past 30 days, two times past 60 days and once 90 days past the due date. If an account is fairly old, it may state that it is a "charge off", if you paid it after it was charged off it may state that it is a "paid charge off."
Collection Accounts: These accounts are being collected, usually by a collection agency, but sometimes also by companies that buy huge portfolios of charged off debt as well as some law firms.
Public Records: These records are usually obtained by a contractor for the credit bureaus. The contractor goes through the public records maintained by various courts and county records offices. Bankruptcies, judgment, satisfaction of judgment, tax liens, releases of tax liens and foreclosures are just some of the records that can go from the public record into your consumer report.
Inquiry Section: This is a listing of businesses that have either pulled your full credit report, pulled certain information on your report or have "prescreening" your report. The credit card company you applied to, the car dealership that illegally pulled your credit report, the credit bureau pulling your report at your request and others will show as inquiries. Generally if your full credit report was procured, an abbreviated name of the business will appear without initials in front of it. Generally, if a company with which you already have an account pulls your credit report or if a company's name appears that you have no affiliation with, there is a chance that your name and address were provided to the company as part of a "prescreening" program. "Prescreening" means that a creditor has gone to the credit bureau and asked for a list of addresses of people who meet certain criteria (e.g. mortgage over $300,000 etc.).
Errors In Credit Reports Occur Often: Fraud, data entry mistakes, improper merging of information by the CRA are all examples of common errors. The errors can be caused by the creditor, the CRA, a thief, or a collection agency or public record.
Documents Are Important. Many credit card companies, banks and even credit reporting agencies provide toll free numbers and websites you can use to dispute credit errors. It's better to document your credit error dispute on paper. However, if you decide to use the phone, follow-up in writing. Acknowledge the conversation (e.g. "this letter is a follow-up to my conversation by phone with your representative named Joe Smith in which we discussed ..."). Send everything in writing by certified mail, return receipt requested. There are many reasons to write the dispute in addition to, or instead of, over the phone. Some of these are as follows:
Send Disputes to Credit Reporting Agencies. It is imperative you send dispute letters directly to the credit reporting agency. First it’s imperative to send the dispute letter to the CRA because you must put the give the credit reporting bureaus on notice. Secondly, it’s important because under the Fair Credit Reporting Act liability of the entity that furnishes the incorrect information depends on the furnisher’s response to the credit reporting bureau.
Send Credit Disputes By Certified Mail Return Receipt Requested. Many attorneys who deal with credit reporting issues think it is imperative you send the disputes by certified mail return receipt requested instead of by phone and over the internet. With certified mail, you can track the letter all the way to the credit reporting bureau and document its receipt.
Where to Send Credit Disputes. It is not absolutely necessary to send disputes to the company furnishing incorrect credit information to the credit reporting agency, but it is the only way you can be certain that the furnisher of the disputed information is fully aware of your complaint. Believe it or not, the credit reporting agencies do not send your dispute documents to the furnisher of information - they typically just summarize the dispute into a code. Your affidavit, police report or copies of other relevant documents will not be sent on. The bureaus are not truly concerned with the "maximum possible accuracy" as required by the FCRA. Like your disputes with the credit reporting bureaus, you will want to send it all by certified mail return receipt requested.
Styles of Credit Disputes. With disputes you want to provide the information necessary to have your dispute investigated and convey what is happening to you as a result of the false credit reporting.
Basics of Contesting Credit Errors. The minimum information is as follows: (1) Name of the company reporting the inaccurate entry; (2) credit account number; (3) a statement that the account was in error; (4) why you believe the credit report is in error; (5) what you want done (i.e. whether you want the entire account deleted or corrected in a certain way); (6) that you want a statement from the CRA of the manner in which it investigated the claim including the name and phone number of anyone contacted in connection with the reinvestigation; (7) your name, social security number, address and date of birth; (8) attach relevant documents to your dispute. Further, you may want to attach a copy of your credit report from that company or a copy of your driver’s license or utility bill that shows your current address if you moved recently. You might also add requests for verification if you are dealing with a collection agency, statement of billing error if you are dealing with a credit card company; and a demand to send corrected information directly to a company that pulled your report if you were denied credit based on an error in a report.