Credit & Money Management
A Peek at Your Personal Dossier
Soon you can get a free credit report. Here's why you shouldn't wait.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, November 2004
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Prepare to persevere
Helen Goff Foster, a lawyer with the Federal Trade Commission, advises a belt-and-suspenders approach to correcting any errors you discover: "You report them to the credit-reporting agency, you report them to the creditor -- work it from both ends," she says. "That will take care of most problems." Givens at the Privacy Rights Clearinghouse rejoins, "Yes, but how long will that take? Maybe ten years." Foster acknowledges that despite a requirement that bureaus investigate a complaint within 30 days or drop the disputed information, there are a lot of possibilities for breakdowns in the process. If the creditor who furnished the bum information reconfirms something that's inaccurate, for example, you'll have to keep up the fight.
Sometimes you can't even get past the credit bureau's mailroom. Michael Baxter, a lawyer in Portland, Ore., recalls one client who suffered identity theft. Although two of the three credit bureaus immediately removed damaging information when it was challenged, the third managed to shred or lose a large package of documentation four times. The bureau's next suggestion? Fax it -- to the mailroom.
"There is no silver bullet by which consumers can get inaccurate information off the report," says consumer advocate Bennett. He describes Equifax's dispute-resolution process, for example, as occurring in multiple locations, including Jamaica, where it may be outsourced to third-party vendors. It's possible, Bennett says, that a credit-bureau employee trying to resolve a dispute will have access only to a credit report showing "exact matches," not the "soft matches" shown on the report used by the creditor.
David Rubinger, a vice-president for Equifax, does not dispute Bennett's claim. But he insists, "Equifax credit-dispute specialists can quickly locate and review credit disputes."
Steps to success
If you're lucky, that will be true. If not, remember these tips: "Repetition," says Bennett. And, "document, document, document," says Givens. The idea is to give the creditor and credit bureau minimal opportunity to claim that they received insufficient detail to resolve the matter.
In addition to filing your challenge with both the credit bureau and the creditor who provided the information, complain to the FTC. The agency can't resolve the matter, but it will forward your complaint to the three bureaus. It certainly won't hurt your case if those involved know the government is watching.
Although filing a challenge online is convenient, follow up with certified mail. If you don't hear back within 30 days, contact the bureau again. Along the way, document any financial consequences of the errors in your credit report, in case you wind up in court.
Once you win the battle and receive a clean, updated copy of your credit report, don't let your guard down. Check your report again within a year. Satterfield was pleased to see his credit score jump about 60 points on the day Experian removed the erroneous tax lien from his record. He's now shopping for a new truck and expects his clean record to earn him the best possible interest rate on a loan.
But consider the experience of Linda Johnson, a small-business owner from Newport News, Va., who has been through the crucible three times. Six months after she successfully sued credit-card issuer MBNA to have disputed information removed from her record, the errors showed up again. The credit reporting agencies removed them after she complained. But one year later, new delinquent accounts showed up on her report. The reason? Equifax and TransUnion had mixed reports of another woman -- Linda Ohnson -- into Johnson's file. Johnson is going to court in Richmond in November to try to clean things up ... again.
--Research: Elizabeth Kountze