Credit Reports - Fixing Errors Can Be Difficult
Most Americans are aware that any time they try to borrow money,
the lender consults with a credit report outlining the
borrower's credit history. These reports are prepared by the
major credit bureaus - Experian, Equifax and Trans Union, and
the reports, along with the accompanying credit score, contain a
distillation of the borrower's entire financial history. Armed
with that information, the lender can make a decision as to
whether granting a loan or credit would be wise. What many
Americans don't know is that most credit reports contain errors.
Worse, it can take months or even years to correct those
problems. In the meantime, the errors may prevent the borrower
from obtaining a loan or credit.
A recent study shows
that nearly four out of five credit reports contain errors.
Worse, roughly one in four contains an error that is serious
enough to prevent the individual from obtaining credit or
borrowing money. Most of these errors are minor; they may simply
consist of an incorrect address, phone number or perhaps date of
birth. Others can be more serious, such as listing a paid loan
as being in default, or including information from another
person's credit history. These types of problems can be serious,
as they can adversely affect the credit score of the individual
involved. The lower the credit score, the harder it is to obtain
credit or to get a loan at a favorable interest rate.
According to the Fair Credit Reporting Act, consumers
are supposed to be able to fix these problems quickly, but it
often doesn't work out that way. Sometimes, even if the person
has proof that the information contained in the report is wrong,
the bureaus are reluctant to correct it. A reason often given is
that the bureaus would prefer to believe the lenders who
provided the information rather than the consumer adversely
affected by it.
The best way to avoid such credit report
problems is to check your credit report regularly and to report
problems or incorrect information immediately. You can do this,
for free, by visiting http://www.annualcreditreport.com, a
Website that allows Americans to obtain one free credit report
per year from each of the three major credit bureaus.