Clean up your credit
report so you can get the loans you need.
To clean up your credit
report, you'll need to order copies of your report
from the three major credit bureaus, review the reports
for inaccuracies or old information, and then ask
the credit bureaus to correct the information.
How to Get a Copy of Your Credit Report
The three major credit
reporting companies are Equifax, TransUnion, and
Experian. You should order your report from all three,
as they often contain different information. To order
directly from one of these credit bureaus, visit
its website.
Equifax
www.equifax.com
TransUnion LLC
www.transunion.com
Experian
www.experian.com
Free Reports
You can get one free
credit report each year from each of the three major
credit reporting companies. To order your free report,
go towww.annualcreditreport.com or call 877-322-8228.
You are entitled
to an additional free copy of your credit report
each year if:
* You've been denied
credit because of information in your credit report.
* You're unemployed and looking for work.
* You receive public assistance.
* You believe your file contains errors due to fraud or identity
theft.
* You've been denied employment (or another adverse employment
decision has been made) based at least in part on information contained
in a credit report.
Credit Reports for
a Fee
If you do not qualify
for a free report (for example, if you have already
ordered your free report for the year), you'll pay
a $10 fee or less (depending on your state requirements).
Information Required to Order Your Report
When you request your
credit report, you must provide your name, address,
Social Security number, and date of birth. If you
moved in the last two years, you may also have to
provide your previous address.
To confirm your identity,
you may also be required to provide information that
only you would know. So be prepared to answer questions
about your previous addresses or the amount of your
monthly mortgage payment.
How to Clean Up Your Credit Report
After you get your
credit report, read through it carefully and start
correcting.
Out-of-Date Information
As you read through
your report, make a list of everything that's out
of date. The following old information should not
appear in your credit report:
* adverse information
that's more than seven years old, including lawsuits,
judgments, paid tax liens, accounts sent to collection,
criminal records (except criminal convictions, which
may be reported indefinitely), late payments, and
overdue child support
* bankruptcies reported more than ten years after the date of the
last activity (usually the date you received your discharge or
the date the case was dismissed, although credit bureaus sometimes
start counting from the earlier date of filing), and
* credit inquiries (requests by companies for a copy of your report)
that are more than two years old.
Note that some adverse
information regarding U.S. government insured or
guaranteed student loans, or national direct student
loans, may be reported for more than seven years.
Inaccurate Information
Next, look for incorrect
information, such as:
* incorrect or incomplete
name, address, phone number, birthdate, Social Security
number, or employment information
* bankruptcies not identified by their specific chapter number
* accounts that are not yours or lawsuits in which you were not
involved
* incorrect account histories, such as a history of late payments
when you paid on time
* any closed accounts that are listed as open -- it may look as
if you have too much open credit, and
* any account you closed that doesn't say "closed
by consumer."
Request Removal
of Bad Information
After reviewing your
report, complete the form the credit bureau provided
to dispute entries in your report. List each incorrect
or out-of-date item and explain exactly what is wrong.
Once the credit bureau receives your request, it
must investigate the items you dispute and contact
you within 30 days. If you let the bureau know that
you're trying to obtain a mortgage or car loan, it
can often do a rush investigation.
If you are right (that
the information is inaccurate or incomplete), or
if the creditor who provided the information can
no longer verify it, the credit bureau must remove
the information from your report or modify it based
on the results of the investigation. Sometimes credit
bureaus will remove an item on request without an
investigation if rechecking the item is more bother
than it's worth.
What to Do If the Credit Bureau Disagrees
If the credit bureau
responds that the information is correct, contact
the bureau directly to discuss the problem.
If you don't get anywhere
with the credit bureau, ask the creditor to tell
the credit bureau to remove the information. Write
to the customer service department, vice president
of marketing, and president or CEO. If the information
was reported by a collection agency, send the agency
a copy of your letter too.
By law, creditors
cannot ignore information they know contradicts information
in their file, and cannot report incorrect information
when they learn that it is, in fact, incorrect.
If you feel a credit
bureau is wrongfully including information in your
report, or you want to explain a particular entry,
you have the right to put a brief statement in your
report. The credit bureau must give a copy of your
statement -- or a summary -- to anyone who requests
your report. Be clear and concise.
How to Rebuild Your Credit
After you've cleaned
up your credit report, work towards getting positive
payment information into your record.
* Get a credit card
if you no longer have one.
* If your credit score is too low to qualify for a regular credit
card, get a secured credit card by paying a deposit of a few hundred
dollars. After you've paid on time for six months to a year, you'll
be able to get a regular credit card.
It usually takes about
two years to rebuild your credit so that you won't
be turned down for a major credit card or loan. After
four years or so, you should be able to qualify for
a mortgage.
For detailed information
on how to clean your credit report, including dozens
of forms and letters on CD-ROM that will help you
repair your credit as easily as possible, get Nolo's
Credit Repair.
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