by Jennifer Fleming

Created on: January 15, 2009

Credit isn't a right to be expected. It's a privilege to be protected.

Consumers are constantly told to check their credit reports. The message comes from TV advertisers promoting their services or from financial advisors and consumer advocates who know consumers are more empowered by knowing what is on their reports. Leaving errors on your credit report can affect your ability to qualify for credit, insurance and employment or cause higher interest rates when you borrow money.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) regulates the collection and use of consumer credit information. Consumer Reporting Agencies (CRAs) collect and share information about consumers for credit purposes through the use of credit reports. By law CRAs must provide consumers with information that is contained in their credit reports and if disputed take steps to verify the accuracy of information. In 2003 congress passed the Fair and Accurate Credit Transactions Act (FACTA) an amendment to the FCRA which states that consumers are eligible for one free credit report per year from each credit reporting agency. This report can be requested by phone, mail or through the federally regulated website annualcreditreport.com. The FCRA also states that if negative information is removed as a result of a consumer's dispute it may not be reinserted without notifying the consumer in writing, within five days.

Types of errors

Errors could be anything from a misspelled name; incorrect address; alternate or inaccurate social security number; or credit information that belongs to someone else, perhaps a family member or someone with a similar name.

A study released in 2004 by the U.S. Public Interest Research Group found that seventy- nine percent (79%) of consumer credit reports contained some kind of error. The types of errors ranged from serious errors that could result in the denial of credit (25%) to errors in personal demographic information (54%).

How do you correct errors?

You can file a dispute online, by certified mail or by phone. It is probably easiest to go online and file your dispute but you are more likely to get better results if you choose to do a little legwork ahead of time and file by certified letter. If you request it, the credit reporting agency must send a notice of correction to any report recipient who has checked your file in the past six months.

Disputing by letter

If you file by letter, you should include your complete name, address, date of birth and social

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