Do you know that you might be denied of a credit even if you have been making payments on time or doing all the things necessary for a good credit record? Yes, this might happen if there's any incorrect information in your credit reports, which have been mistakenly reported. So, you need to follow these steps in order to have a clean credit record.
1. Order your credit reports from 3 bureaus - You should always order your credit reports from each of the 3 major bureaus namely, Experian, Equifax and TransUnion. Usually, you are entitled to get a free copy of the credit reports every year unless you're a victim of identity theft or you're unemployed and searching for a job; in these circumstances, you can get free reports more than once in a year.
2. Look for incorrect items in your reports - After getting copies of your credit reports, carefully go through each of them and find out and inaccurate or outdated information. This includes the following:
Inaccurate information -
- Late payment marked when you have paid the bills on time
- Account(s) that don't belong to you
- An account mentioned as open when you've closed it
- Inaccurate or incomplete name, birth date, address, phone number along with your SSN and employment details, etc.
Out-of-date information -
- Adverse information such as, judgments and lawsuits which are more than 7 years old
- Any credit inquiry which has been made more than 2 years before
- Bankruptcy being reported for more than 7 or 10 years (As Chapter 7 is reported for 10 years and Chapter 13 is reported for 7 years)
3. Dispute incorrect information (if any) - If you find any incorrect information in any of your credit reports, then you need to dispute it with the specific bureau(s). To do so, at first you need to fill out a form (provided by the bureaus which is usually available online) and write to the bureau with the documents. You need to make copy of the specific credit report, highlight the item and mention why the information is wrong. It is better if you can provide required documents as evidence. Then, attach all the documents and send the letter to the bureau through a certified mail with a return receipt request.
4. Credit bureau responds to your request - A credit bureau needs to respond to your dispute through written communication within 30 days. What happens is, the bureau forwards the request to the original information provider, which investigates and responds back to the bureau. After the completion of the investigation, the credit bureau will send you a copy of your report, if incorrect information was displayed in your report, previously. You can also request the credit bureau to send a correction notice to all the organizations which had accessed your report in the past 6 months.
This way, you should monitor your credit reports every year and dispute the inaccurate information in your reports in order to maintain a clean and good credit record. This will help you continue enjoying the privileges of a having a clean credit record and a good credit score.