Correcting Errors

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It is very important to remember that the credit bureaus are not obligated to verify information as it is being reported to them. They will only do so if YOU notify them that inaccuracies or mistakes are appearing on your report. You are ultimately responsible for the accuracy of the information that appears. Fortunately, another important provision of FACTA allows consumers more freedom to dispute inaccurate information on their report. Previously, disputes about the accuracy of information in a consumer report could only be filed with the credit reporting agency. Under new FACTA provisions, in certain circumstances, a consumer may dispute inaccurate information directly with a creditor. Upon notice of disputed information, the creditor must investigate the account and cannot report negative information while the investigation is pending. Consumers will still be able to dispute information directly with the credit-reporting agency, which will launch its own investigation. Investigations are usually concluded within 30 to 45 days of the date the bureau received them. If additional information is needed for the investigation, the credit bureau will contact you and let you know what is needed to complete the processing of the dispute.

Adding a Statement to Your Report

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If you'd like to explain a specific entry in your report or feel that some of the information there has been wrongfully included, you may consider adding a brief statement to your file. If a reporting bureau helps you write your statement, it will be limited to 100 words or less. If you create the statement yourself there is no limit, but you're still better off being brief, for several reasons. The credit reporting agency is only obligated to provide a summary of your statement to anyone requesting your file. A brief statement may be included without being edited. The longer a statement is, the more likely the bureau is to edit it heavily. Your 1000-word explanation may be reduced to just two or three sentences. At your request, the bureau must also send your statement to anyone who requested your file over the preceding six months, or up to two years if prospective employers requested the report. Keep in mind, however, that the bureaus are only required to include your statement for free if you are disputing the accuracy of a specific item. They may allow you to explain extenuating circumstances that prevented you from meeting your obligations over a period of time, but in that case they may also charge you for such a statement.

Unless you want to address a particular dispute or inaccuracy, it may be more useful to you to explain such negative marks directly with the lenders to whom you're currently applying. A face-to-face discussion of a past credit issue will allow you to describe the situation more fully.