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What can I do if i find errors in my report?

There is no denying that errors can and do appear in credit reports. The July 2000 issue of Consumer Reports cited a study where more than 50% of the credit reports checked contained errors. A 2004 survey conducted by the U.S. Public Interest Research Group (USPIRG) found that one in four credit reports contain serious errors.www.uspirg.org/uspirg.asp?id2=13649&id3=USPIRG&

There are two main reasons errors may appear on your credit report. One is when you have been mistaken for another person with a similar name and their information ends up in your file. The other more serious cause of error is fraud. Someone may have intentionally gained access to your personal information and obtained credit in your name. Instances of identity theft are increasing.

Read more about identity theft in our guides:

Both state and federal laws provide you with the right to have errors corrected. Credit bureaus are regulated under the California Consumer Credit Reporting Agencies Act (California Civil Code section 1785 et seq.), the laws of other states, and the federal Fair Credit Reporting Act (15 USC 1681 et seq.).

For information on the law in your state, contact your state's consumer protection bureau or office of the Attorney General. National credit bureaus must have a toll-free number so you can contact them with your questions. Also, credit reports must provide an address to request an investigation of inaccurate information.

Once you have notified a CRA of your dispute, both federal and California law allow 30 business days for an investigation. The bureau must consider all the relevant evidence you give it, and errors must be corrected. If the CRA cannot verify negative information, it must be deleted from your file. You are entitled to receive a free copy of your corrected report.

You may ask the credit bureau to send a corrected report to anyone who has requested your file in the past six months, as well as to anyone who has requested it in the last two years in relation to employment. Remember, when corresponding with the CRAs, be sure to make copies of all letters, and mail them certified return receipt requested.

If you disagree with the result of the CRA's investigation, you have the right to submit a 100-word explanation. The credit bureau must include the explanation in your file although the negative information will not be removed.

Some consumers who have had errors corrected find the incorrect information reappears in their files at a later date. Both federal and California laws require credit bureaus to notify the consumer within five days of reinserting information. Negative information cannot be reinserted into your file unless the credit bureau takes the added step of having the source of the information certify that it is complete and accurate. Credit bureaus must provide the subject of the report with a toll-free number to dispute the reinsertion and the opportunity to include a dispute statement.

The recent FACTA amendments to the FCRA also place new obligations to investigate errors on companies that furnish information to a CRA. Nonetheless, even if you have had errors in your report corrected, it is wise to periodically check your credit report to make sure the errors do not reappear.

What is a FICO score?

FICO Score. FICO is a credit score scale used by many mortgage lenders that use a risk-based system to determine the possibility that the borrower may default on financial obligations to the mortgage lender.

Banks and Credit Card Companies use FICO scores to decide whether to give you credit, and what interest rate you'll get. It's very important that you have a good score, or else you'll be denied credit cards, auto loans, mortgage loans, or even cell phone or other payment plans. Insurance companies are even using your FICO score to decide what to charge you! If you want to qualify for any loan and get a low interest rate that will save you a ton of money, you need to have a solid FICO score.

FICO scores range from 300 to 850. Most people have a pretty decent score--the median is 723. That score will get you favorable credit cards and loans. But if you're the type of person who is late on your bills or maxes out your cards or commits any number of other credit no-nos, your score will be much less than this.

Fair Isaac Corp., the developer of the FICO score, is preparing to pull the plug on schemes that allow high quality credit card histories to flow into the credit files of people with bad credit, thereby boosting scores.

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