If you're about to apply for a mortgage or car loan, it's a good idea to check your credit history beforehand. That way you can fix any errors and point out any blemishes that do belong to you in advance.
It's common for reports to have errors, says Steve Rhode, president of Myvesta.org, a nonprofit financial counseling organization. One of his clients at Myvesta.org recently discovered he was listed as deceased on his credit report. (Someone with the same name had died, and the credit agency recorded the information on the wrong report.)
The most common mistake, Rhode says, is an account listed on your record that doesn't belong to you. The more common your name is, the more likely this will happen.
To be on the safe side, Rhode recommends routinely checking your reports once a year. "No one cares about the accuracy of your report like you," he says. You should get a report from all three major credit agencies because they may contain different information. (To order your reports, see the box below.)
How to set the record straight
If you find an error, the Fair Credit Reporting Act requires credit bureaus and organizations that provide information to them to correct the mistake. But you have to get the ball rolling by requesting an investigation.
You can file a dispute online, by phone or by certified letter. A letter should include:
Your complete name, address, date of birth and social security number.
The name of the company you have a dispute with and account number of the disputed item.
The reason for your dispute, any corrections to your personal information and a request for correction.
Before you fire off a letter, do some research and gather documentation to back up your claim. Disputed information that can't be verified must be deleted by the credit bureau. If an investigation isn't resolved in your favor, ask the credit bureau to include your version of the dispute in your record.
Accurate negative information usually stays on a credit report for seven years -- ten years if you've filed for bankruptcy. If you know the blemish on your report is accurate, you'll have to live with it. The best way to repair your credit, says Rhode, is to keep paying your bills on time and start building a spotless record.
If you live in Colorado, Georgia, Massachusetts, Maryland, New Jersey or Vermont, you're entitled to a free report each year. You also can get a free report if you've been denied credit, employment, insurance or rental housing in the past 60 days, or if you believe your credit file is inaccurate because of fraud.
Otherwise, you can order your credit report for $9 from Experian (866-200-6020), Equifax (800-685-1111) and TransUnion (800-916-8800). All three allow you to view your report online.
Equifax and TransUnion assign you a user ID and password to let you view your report more than once (30 days for Equifax; 6 days for TransUnion). You don't get this feature with Experian and, if you hit the back button while viewing your report, you'll have to pay again to view it.
You also can see your credit score from TransUnion for no additional charge (see Know the Score Before You Borrow), but at Equifax or Experian you'll have to pay $12.95 to see your score along with your report.
GETTING STARTED
