by Dale G. Holmes

Created on: February 11, 2008

Research has shown that seven out of ten consumer credit reports contain inaccurate information. This inaccurate information can lead to a number of problems for you including higher interest rates when applying for credit, loss of job opportunities, and even identity theft.

The first step in removing or correcting inaccuracies in your credit report is to identify what is inaccurate in the first place. You'll need to obtain copies of your reports from each of the three major credit bureaus Equifax, Experian, and Transunion. The Fair and Accurate Credit Transaction Act of 2003 (FACTA) made this much easier by mandating that consumers are entitled to one free credit report from each of the credit bureaus every year. To obtain your reports go to annualcreditreport.com and request copies.

Review the reports carefully and looks for items that may be incorrect. Be sure that you name, date of birth, social security number, current address, and previous addresses are all being reported correctly. Verify that the accounts being reported are yours and that all information being reported regarding those accounts is correct. For example, if you know that you closed a credit card account the status should be reflected as "Closed by Consumer".

If you find an inaccuracy the quickest and easiest way to correct or remove the information is to dispute it online. When you obtained your credit reports from annualcreditreport.com you were forwarded directly to each bureau's website. You can now use the link sent to you in an email or go directly to the websites and follow the instructions to file a dispute. You will be able to identify which items you want to dispute along with choosing a reason for the dispute.

The Fair Credit Reporting Act requires that credit bureaus investigate disputes and report the results of the investigation to the consumer in 30 days. The credit bureaus will contact the furnisher of the information for verification. If you are not satisfied with the results of the investigation you have the option of requesting the name and contact information of the person that verified the information with the credit bureau.

It is also possible to dispute items by regular mail. You simply type or write a letter to the credit bureaus and mail it to the appropriate address. For simple disputes this method might not be as efficient as online disputes, but many swear by this method when it comes to correcting or removing items that were not resolved by online disputes. Members of websites such as creditboards.com go so far as to suggest certain color ink and paper in order to prevent the bureaus from scanning the information into a computer, the idea being that a human will have to manually read and respond to the dispute.

Every consumer should take the time to review their credit reports on an annual basis and correct any incorrect information. Correcting inaccurate information makes sure you are not surprised by possible negative information when you apply for new credit.

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