How to Fix Your Credit Report

What is on your credit report affects not only whether you can get a loan, but how much interest you'll pay for that loan. The long term solution to a poor credit report is to start paying everything on time, and clear up any debts. Short term, you may be able to "fix" your credit report, and so raise your FICO score, especially if there are real mistakes on the report. This will enable you to borrow at lower interest rates and save hundreds or even thousands of dollars.

Fixing a credit report starts with seeing what's on it. You may get access for free online. Try a search for "free credit report." Alternately, when you are denied credit based on a report issued by a local credit reporting agency, you can request a free credit report from that agency within 30 days.

There are three major credit reporting companies:

Experian 1-888-524-3666
Equifax 1-800-685-1111
Trans Union 1-800-916-8800

Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it's important to verify its accuracy. Double check the "high credit limit,"'total loan," and 'past due" columns. It's a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports but some states permit citizens to acquire a free one (usually one per year). Contact the reporting companies at the numbers listed for more information.

A quick look and you'll have an idea why you were denied credit. Now how do you fix what you see? What if you find incorrect information on the report? What if you want to change information that is accurate, but unfair?

First, if there is anything you want to dispute in the report, you can write a letter to the agency. Tell them exactly what is incorrect, and they must investigate. Send copies of any documentation, such as canceled checks, and send it all by certified mail.

The agency must contact the source of the disputed information. If they receive no confirmation within 14 days, they must delete the item from their files, and send you an updated report. You can demand that they send the corrected report to all creditors that received your credit report in the previous six months. This last part won't be done automatically, so be sure to demand it.

Honestly, if the item is under $500, or is more than a year old, usually creditors don't bother to respond. This means fixing a credit report is possible even if it isn't incorrect. Also, if you don't succeed on your first attempt, you have the right to dispute the item again after 30 days.

When an item can't be removed, you have the right to add a 100-word explanation permanently to your credit report. All who receive the report will see your explanation. For example, if you had a valid argument with your doctor over a charge, you can explain the details.

It may take a long time to fix your credit report if it is based on a history of late payments and loan defaults. But even in this case, you can correct little errors, and explain anything that isn't fair. This will make it look a little better while you start paying bills on time and doing the other things necessary.

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