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FHA loans and disputes on credit report

Credit report graphicYour credit report is a lot like your high school report card. For example, let's say your first car loan had some late payments, we'll give that one a C, but your credit cards were always paid on time, we'll give your credit cards an “A”. Each credit account, past and present is graded. Think of your credit report as your financial credit report.

Your credit report includes not only your bill paying history, but the number of credit accounts you have (or had) and what type of credit account (i.e. revolving, car loan, school loan, etc.).
The credit report will list any collection accounts, late payments, public records, and judgments.

Public records include your name and any variations (i.e. married name, maiden name, senior, junior), your date of birth, current and previous addresses, social security number and employment information.

Free credit report

Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company from AnnualCreditReport.com. The only source for your free credit reports authorized by Federal law.


How does all this information finds it's way on the credit report?

The credit bureaus gather your information through the same lenders who granted you credit. The lenders inform the credit bureaus whether your payment was paid on time or if your payment was late. Your employment and personal information is gathered from credit applications. In short, you give up this information when you apply for credit.

Unfortunately, errors occur on credit reports, in fact according to a report by 60 Minutes (see below), "one in five credit reports have errors".

Common errors on a credit report include:
• Credit listings incorrectly listed as late, inaccurate credit limits, balance errors, closed accounts still displayed as open, duplicate accounts, incorrect delinquency dates.

• Loans and credit accounts that you never opened.

• Misspelled name, incorrect Social Security number, address or inaccurate phone number. Be on the lookout for . . .

  • misspellings or any other inaccurate information
  • identity theft
  • unwarranted collection accounts and judgments.
  • unjustified late payments.

The Consumer Financial Protection Bureau recommends that consumers take a look at their credit report at least once a year.

What should I do if I find incorrect information on my credit report?

1. The first thing you should do is to contact the creditor and in a calm voice explain to the customer service representative the mistake on your credit report and ask the rep to make a correction to you credit record with the credit bureaus. Ask the representative to provide you with a letter or email acknowledging the mistake and or correction.

2. If the company is unwilling to correct the mistake, you should send a letter to both the credit reporting company and the creditor of the incorrect information.
 
State clearly, with evidence, if possible, what information is in error on the credit report. State the facts, explain why you are disputing the information, and request a correction. You may want to enclose a copy of the relevant portion of your credit report along with your dispute letter to the creditor.

Clearly highlight the item or items in dispute. Never send any original documents supporting your claim of inaccuracy. Always send copies. Retain copies of your dispute letters and other information sent to the credit agencies and creditors.

The Consumer Financial Protection Bureau provides instructions  and a template letter  as a guide.

If the creditor ignores your request, you can dispute the error directly with the credit bureaus:

Equifax

Online: www.ai.equifax.com/CreditInvestigation

By mail: Download the dispute form
Mail the dispute form with your letter to:

Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30348

By phone:
Phone number provided on credit report or (866) 349-5191

Experian

Online: www.experian.com/disputes/main.html

By mail:
Use the address provided on your credit report or mail your letter to:
Experian P.O. Box 4500
Allen, TX 75013

By phone:
Phone number provided on credit report or (888) 397-3742

TransUnion

Online: https://dispute.transunion.com

By mail: Download the dispute form
Mail the dispute form with your letter to:

TransUnion LLC Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016

By phone: (800) 916-8800
Keep copies of your dispute letter and enclosures.

"One in five credit reports have errors"

Here's a great 60 Minutes video discussing the accuracy and importance of credit reports and credit scoring

What do I do if there's a mistake and no one wants to help me?

If the traditional methods of credit repair does not work, then you should file a complaint with the Consumer Financial Protection Bureau. I was surprised to read on their web site that "most companies respond to complaints within 15 days."

Submit a complaint

We’ve handled over 1 million complaints, helping consumers connect with financial companies to get direct responses about problems with mortgages, student loans, payday loans, debt collection, credit reports, and other financial products and services.

Every complaint we receive gives us insights into problems that people are experiencing in the marketplace and helps us to identify and prioritize problems for potential action. The result: better outcomes for consumers, and a better financial marketplace for everyone.
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