FHA loans & disputes on a credit report - how to fight back

Credit report graphicYour credit report is quite similar to the report card you received in high school. For instance, if your initial vehicle loan had some late payments, we'd give it a C; but, if your credit cards were always paid on time, we'd give them a "A." Each credit account, both current and historical, is evaluated. Consider your credit report to be similar to your bank credit report.

Your credit report contains information on not just your payment history, but also the number of credit accounts you have (or formerly had) and the kind of credit accounts you have (or previously had) (i.e. revolving, car loan, school loan, etc.).

Credit reports include information on collection accounts, late payments, public records, and judgements.

Your name and any variants (i.e. married name, maiden name, senior, junior), date of birth, current and prior residences, social security number, and job information are all included in public records.

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. According to Federal law, this is the sole source for your free credit reports.

How does all this information finds its way on the credit report?

Credit bureaus get your information from the same lenders that extended credit to you. The lenders notify the credit bureaus whether your payment was made on time or was late. Credit applications collect information about your work and personal circumstances. In a nutshell, you provide this information while applying for credit.

Unfortunately, credit reports include mistakes; in fact, according to a 60 Minutes investigation (see below), "one in every five credit reports contains 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 call the creditor and calmly explain the error on your credit report to the customer care person, requesting that the rep repair your credit record with the credit agencies. Solicit a letter or email from the representative admitting the error and/or rectification.

2. If the business refuses to rectify the error, you should write to both the credit reporting bureau and the creditor informing them of the error.

Clearly state, with proof if available, what information on the credit report is incorrect.
State the facts, justify your contentions, and seek a correction. You may want to include a copy of the relevant section of your credit report in your dispute letter to the creditor.

Make a point of emphasizing the issue or things in contention. Never submit any actual papers to substantiate an inaccuracy allegation. Always include duplicates.
Keep copies of any dispute letters and other correspondence made to credit bureaus 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
Send the dispute form together with your letter to the following address:

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."

The Consumer Financial Protection Bureau has handled over a million complaints, assisting customers in connecting with financial firms to obtain straight answers regarding issues with mortgages, student loans, payday loans, debt collection, credit reports, and other financial goods and services.

Every complaint CFPB receives provides CFPB with insight into the issues that individuals are encountering in the marketplace and assists us in identifying and prioritizing concerns for possible action. As a consequence, customers benefit and the financial market as a whole benefits.
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