How to Check Your Credit Report (and Correct the Mistakes)

I received some less than pleasant news yesterday: GE Capital Retail Bank, the creditor behind my Mastercard, is planning to decrease my credit limit to the higher of my current outstanding debt or $500.  This, in and of itself, is not that bad of a thing; I have actually been considering canceling that account when it has been paid off, to try to avoid adding more debt in the future.  At worst, this just clinches my decision to drop this credit card when I’ve paid off that account (perhaps after I’ve cleared some extra credit on my other card, but that’s another story).

The real problem with this news is the reason why they are dropping my credit limit: They claimed that my credit did not do well compared to others.  They provided a list of reasons (without too many details) for why my credit score had fallen so much, and thus why they were dropping the level of credit I have available.  Given that I have been paying all of my debts on time and as efficiently as I am able, this accusation, for lack of a better word, leaves me feeling…upset, to say the least.

When I start to feel like that, I like to look at a puppy to make me happier.
When I start to feel like that, I like to look at a puppy to make me happier.

But it occurred to me, getting upset doesn’t do much to improve my situation.  What will improve my situation is reviewing my credit report and seeing if there are any mistakes that I can get corrected.  While I’m doing that, I figured I could share the details about how to do so with my readers, so if you find yourself in the same situation I am in (or want to keep yourself from ending in this sort of situation), read on.

Checking Your Credit Report and Score

Luckily for those of us in the US, checking our credit report is easy and free, thanks to the Fair Credit Reporting Act.  This act requires that three of the biggest credit reporting companies, Transunion, Equifax, and Experian, provide every citizen with a free credit report once every year (among other things, most of which we are about to cover).

To get your credit reports, all you need to do is go to annualcreditreport.com, fill out the form, and you’ll get your credit report in a matter of seconds.  If you prefer, you can opt for the phone or mail service, although I’m guessing most people reading this blog will prefer the electronic method.

Keep a few things in mind while you check out your credit reports in this method:

  • That’s annualcreditreport.com, not freecreditreport.com; the latter is run by Experian and isn’t actually free after the first seven day trial.
  • You only get one report per reporting company per year.  If you want more reports, you will have to pay each reporting company for the report(s).
  • These reports, while very useful, don’t actually have your credit score as part of them.

To get your credit score, you will need to pay one or more of the agencies a fee to get the numbers from them.  You actually have three different credit scores, and your creditor(s) may use any one or more of them to determine how much credit to give you and how much interest to charge you.  (Actually, there are nearly fifty different FICO scores out there.  The ones from Experian, Equifax, and Transunion are by far the most popular, though, and the easiest to find your score and report for, so they are the ones I will be referring to in the rest of this article.)

If you are seeking more credit, from a new credit card to a home mortgage, you may need to check one or more of the credit reports to determine if they are accurate.  (The more credit you are being offered, the more likely that the creditor will check more than one report.)  If they are, that’s pretty much it.  You’re good (or as good as you’re going to get with your current credit score).  If there are mistakes, though, it’s time to look into

Correcting Credit Report Mistakes

If there is a mistake or mistakes on your credit report (and there are millions of such mistakes out there, so it is possible), it’s time to dispute your credit report.  It’s a bit annoying, but luckily, not terribly hard; just follow these simple steps:

  1. Once you notice a mistake on one agency’s report, you should check the other two reports to see if they also show the same mistake.  You want to ensure that all three of the major agencies’ reports are accurate, and a mistake on one likely means a mistake on all.
  2. Contact the credit agency (or agencies) with the credit error in writing about why you feel the information is inaccurate.  You need to send supporting evidence (copies, not originals) for your case.
  3. When you mail your disputes and supporting evidence, make sure to send it certified mail or return receipt requested so as to know when it arrives.
  4. At that point, it’s pretty much wait to see what happens.  Credit reporting companies have thirty days to review your dispute, so it could take a few weeks to hear a decision.

That’s pretty much it.  If your dispute is considered valid, the credit agencies will make the change on your report and send you a new copy showing that change.  You’ll have to buy access to your credit score to see if it made any change; given how relatively small changes in your score can lead to big changes in how you are viewed as a credit risk, it’s good to know where you stand.

If your dispute is not considered valid, things will get trickier.  You can dispute the charge again with the credit agency, but you’ll need to provide further supporting evidence, and hopefully you sent (copies of) all the supporting information you had along with the first dispute.  You could also dispute the error with the creditor; they will have 30-45 days to look into your dispute to see if there is any relevance.

A final note: this method only works with mistakes on your credit report, not accurate points you simply wish were different.  You are not able to get dropped charges or payment failures removed just because you would like them gone.  Neither you, nor any agency claiming to be able to clean your credit report, can get accurate things dropped from your credit report.  Just be aware that there are limits to what correcting your credit report can do.

That tells you what I have planned this week.  When was the last time you checked your credit report?  Do you know where your credit score stands?  Do you think this dependency on credit scores is a bit too crazy?

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