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Whether you are buying a new car, purchasing a new home, obtaining insurance or applying for a new job, your credit history must be free of errors that could affect your credit report. A survey from 2004 indicated that an astonishing 79% of all credit reports contained some type of error and 25% had errors that resulted in denial of credit for the affected individual. These errors can range from misspelled information, accounts that don't belong to you and delinquent payment notifications. What do you do if there are errors on your report?

Follow these steps:

1. Get a copy of your credit report:

In any case, if you are denied credit or some other service that was due to information obtained from your credit report you are entitled a free copy of your report. Typically you will be informed by letter and given the option of contacting one of the top three credit reporting agencies; Trans Union Corp, Equifax, or Experian, in order to obtain a copy. According to the Fair Credit Reporting Act (FCRA), these agencies are responsible for correcting mistakes, not the creditor in question. For all your rights, go here.

2. Contact the credit reporting agency by mail:

You have to let the agency know that you have a dispute and it must be in writing. You can see an example of a typical letter here. Your letter should be addressed to a specific individual and must include any evidence that you think will prove your case. Send copies, not originals, of any receipts or payment information that you have. Keep a record of your communications with the agency. It may come in handy later on.

3. Review their response:

Credit reporting agencies must investigate any disputes that they deem legitimate typically within 30 days of receiving the complaint. As part of their investigation they must forward the complaint to the creditor which reported the information. The creditor will then commence an investigation and send their results back to the reporting agency. Obviously this process can take some time, so be patient.

4. Evaluate the investigation results:

If the investigation results in a change, you will be sent a free copy of your corrected report. You may also receive a copy of the universal data form (UDF) that was used to correct your account. At your request, the credit reporting agency will also send an amended copy to any creditors that received your flawed report in the last 6 months. Employers that were issued a copy of your credit report over the past 2 years will also receive a new report disclosing the amended errors.

5. Pursue additional actions:

If the disputed item is deemed correct, you may have to live with that fact for 7 years or 10 years if you have previously filed for bankruptcy. Making your payments on time is the best way to clean up your record. If you still feel that your complaint is legitimate, you can hire an attorney, employ a credit repair agency, complain on a blog or website, contact a news reporter, or submit a complaint to the Federal Trade Commission.

Learn more about this author, Michael Riley.
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