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How To Clean A Credit Report?

How To Clean A Credit Report?

A credit report is crucial when applying for a job, seeking a mortgage to buy a new home or trying to buy a new TV with an in-store credit card. All of these decisions which are made by retailers and other financial institutions hinge on what is contained in an individual's personal credit report. It is an unfortunate fact that millions of credit reports have inaccuracies and misinformation that not only limit a person's ability to successfully obtain employment or rent an apartment but also lead to higher interest rates on new lines of credit. Every consumer should review their credit report and expedite any necessary corrections to improve your ability to obtain credit.

Federal law requires each of the three major credit reporting agencies, Experian and Equifax and TransUnion, to provide one free annual credit report upon request to consumers. While this law was born from the need to combat identity theft it also allows consumers to monitor their credit in a timely fashion for additional benefits. One of the primary benefits is it finally allows consumers an insight into what appears on their credit reports and how it impacts their ability to obtain credit. Any black marks or inaccuracies could explain why they may or may not have been denied credit in the past or didn't get a job.

Inaccuracies which appear on a credit report could be as mundane as a transposed number for a previous address or as serious as a legal judgment or bankruptcy for which you are not responsible. In the end it doesn't really matter what the scale is of the inaccuracy that is measured. Any black mark which appears on a credit report can trigger a negative response leading to denied credit or worse. Common inaccuracies include incorrect addresses, paid in full accounts which still show a balance, inaccurate reporting of accounts which are in good standing, duplicate lines of credit for which you never requested or applied for and judgments or bankruptcies that should no longer appear on the credit report.

Credit reporting agencies are required by law to respond to any customer corrections within 30 days or less. While they often provide an 800 customer service number it is best to send all corrections in writing to a specified address preferably by registered mail. If you make phone calls try to record the call if possible and advise the other party that you're doing so for legal purposes. Provide as much written documentation as possible to show that the error is incorrect and that it needs to be fixed. Sometimes it is easier to contact the financial institution or retailer which reported the inaccurate information to begin with and have them make the fix. The credit bureaus will have to contact these entities regardless so it may be more expedient to contact them yourself. If the information is not corrected in a timely manner you may need to seek legal recourse and contact a lawyer to file a lawsuit in federal court. While this should be unnecessary, sometimes it is the only way to force the large credit bureaus to correct your information.

A clean credit report is an absolute necessity to obtain lines of credit such as a mortgage or auto loan at the best possible interest rates. The above steps are an approximate guideline on how to clean a credit report however additional information is provided at the credit reporting agencies websites. Many individuals spend decades building good credit histories and their credit reports become an invaluable tool impacting all aspects of their lives. Don't let inaccurate information and other errors hold you back financially due to other people's mistakes. Take advantage of the processes in place to clean a credit report and benefit from your years of hard work.

Image by: Frederic Poirot