Your credit report proves your worthiness for renting a house, buying a car or applying for a business loan. Yet it could be full of errors unless you check it regularly, and if you spot an error, you face a long delay in getting it corrected. If you have credit errors, you have options under the law to restore your credit and peace of mind.
How credit errors wreck your life
Since lenders pull your credit report before approving you for a loan, and landlords check your credit report before renting to you, errors on the report can have big implications. In the last four years, consumers have initiated over 158,000 complaints against the "big three" credit reporting agencies.
The majority of these complaints are for wrong information on credit reports. This could be everything from fake debts to criminal allegations committed by someone with the same name. A study from the Federal Trade Commission (FTC) found that 5 percent of credit report errors were significant enough to devastate someone's credit -- for example, by causing sky-high insurance rates or preventing their approval for a line of credit.
As these examples illustrate, you may be unable to achieve your goals until the matter is cleared up. The slow pace that the reporting agencies move is unconscionable and can cause you significant mental and emotional distress while you try to resolve the errors that may negatively impact your life.
What to do if your credit report has errors
Check your credit report at minimum once a year; ideally, at least a month before you plan to lease a car or do anything else that would trigger a credit check. Review the report carefully for errors. If you find an error, send a letter to the creditor reporting the error and ask them to remove the incorrect information from your report.
If they take no action, call the credit reporting agency and describe the matter to them. The credit reporting agency should help you remove the incorrect information, but the process can take time. In the meantime, you may be unable to move forward with your financial plans.
If you are unable to get the errors corrected on your own, speak with an attorney. You may be able to file a complaint with the Consumer Protection Agency, Federal Trade Commission or other entity. These entities will forward your complaint to the credit reporting bureau. If they have enough consumer complaints, the credit reporting agency may decide it is time to fix their errors.
If you feel the harm was grievous, you might seek damages from the credit reporting as well. Speak with an attorney knowledgeable about debt relief matters about your situation and legal rights.