Correcting Your Credit Reports

What you should know:

By law, both the credit bureaus and the information providers—the credit grantors who give them information about you—are responsible for correcting inaccuracies on your credit report. To make sure this really happens, attack on both fronts: contact the credit bureaus and the information providers.

What you should do:
First call each of the three credit bureaus, and follow up in writing. Your letter should be detailed and specific: identify each item you are disputing by the name of the company and the type of account; for each explain why you are disputing it, and ask that it be corrected or deleted. Include any supporting documentation that you have, such as the Identity Theft Affidavit and police report. If you already have documents from the credit grantor agreeing that the charge or account is fraudulent, you definitely want to include copies.

What they have to do:
The credit bureau gets 30-45 days to investigate your case. (If they think it’s frivolous and aren’t going to bother with it, they have to let you know within five days.) The credit bureau then sends you a written report of the outcome. If the information provider—the store or bank where the fraud occurred—determines that your claim is true and the items you are disputing are in fact incorrect, they are responsible for notifying all the credit bureaus they work with. The credit bureaus must, by law, correct or delete all the inaccurate information, including all fraudulent accounts and charges, and any fraudulent inquiries.

What you should do then:
Make sure everyone knows! If you ask, the credit bureaus must send corrected copies of your report to any business who has received it in the last 6 months, and to any employers who’ve had a peek in the last two years. If there are still problems with your credit report, you can ask to have a statement added to it to explain your side of the story.

How to Stay Organized and Be Effective

If tying a string around your finger is your only system for keeping track of stuff, your hands will soon be so knotted with string that you won’t be able to dial the phone. Maybe you should find a new system, before you cause a national string shortage. Try these strategies:

• Send all letters certified mail, return receipt requested. This gives you a record of when you sent something and when it was received.
• If you want to play it extra safe, ask the people you speak to for written confirmation of your conversations. If they refuse, you can write to them (certified mail, return receipt requested, of course), list what was said, and ask them to write back if anything is incorrect. If they don’t reply, that can serve as your confirmation.
• Keep copies of all letters and forms you send.
• Keep the originals of every piece of paper you didn’t generate—like police reports, credit reports, and all letters you receive.
• Hang on to all your old files, even after you think the ordeal is over. If any¬thing comes back to haunt you, Murphy’s Law says you’ll need that one piece of paper you threw out.
• Always have a plan of action. List what you need to accomplish, how you can do it, and whom you’ll need to speak to.
• Keep a log of everything you do—every letter you send and receive, every phone call you make. (You can leave out the bathroom breaks.)
• Keep records of all phone conversations: names of the persons you spoke to, their titles, and phone numbers; what you discussed; what they agreed to and when; what they need from you and when.
• Use a filing system that will give you ready access to everything you need. (That pile in the corner is not a filing system.)
• Follow up all phone calls and face-to-face conversations in writing. The people you talk to at credit card companies and law enforcement agencies may deal with hundreds of calls just like yours every day. Even if they sound reassuring on the phone, they might forget you the moment they hang up, and it’s only your word against theirs that you ever spoke. Putting things in writing will jog some memories and give you proof that the communication actually occurred.
• You may want to keep track of your costs, in case your thief is caught. Your chances of getting some money back are much better if you keep a log and save your receipts. Eligible expenditures may include: phone calls, postage, mileage, legal assis¬tance, notarizing, court costs for documentation, time lost from work, organizational and reference materials, and personal assistance like a babysitter or an accountant.

Decephering Your Credit Report

Okay, you got your credit reports, but oh dear…they don’t seem to be written in English. Don’t panic—you don’t have to understand every detail to look for signs of identity theft.

Here’s what you need to check out:

• The “Applicant” and “File Variations” sections at the beginning of the report list your personal information. Look here for details that just don’t click. If the date of birth is totally off or there’s an address where you’ve never lived, that’s a clue that someone who isn’t you has been opening credit accounts in your name.
• Your report will also list “Aliases” and “Former Names”—make sure all of these are names you’ve actually used. (To simplify things and prevent errors, it’s best to always use the exact same name when applying for credit. Make a choice now about your middle initial and stick to it.)
• Look closely at the “Credit History”section and check for accounts you don’t recognize. For the accounts that are legitimately yours, make sure the number under the “Balance Owing”column jibes with what you’ve really spent.
• The “Inquiries” section tells you who has requested your credit report— something which is typically done before opening a credit account for you. If an identity thief got a credit card in your name, the credit card company will be listed here, on at least one of the reports. So look carefully for any inquiries you don’t remember authorizing.
• Some quirks in your report may be the result of a clerical error rather than identity theft. Even so, you should get the mistakes cleared up so that your report is 100% accurate.

How to Get Your Credit Report

There are three major credit bureaus in the U.S Equifax, Experian, and TransUnion.

To stay on top of your credit situation—and give yourself half a chance to catch identity theft as soon as it happens—you need to order a copy of your credit report once a year from each of the three major credit bureaus.

Wait a minute, you’re thinking—once a year? Is that often enough? You’re right—it’s not. An identity thief could do a lot of damage to your credit in twelve months, so to get more bang for your buck, it’s a good idea to stagger your orders from the three different credit bureaus. Look at Equifax in January, TransUnion in May, and so on. If you notice anything suspicious one month, order the other two as well so you have all the information as soon as possible.

Why check all three?

Well, if life were simple, your reports from Experian, Equifax and TransUnion would be identical. But they probably aren’t. The three bureaus may get different information, and there’s likely to be a typo or two, just to keep things interesting. Also, when checking your creditworthiness, lenders might order your report from only one of the three bureaus. That means the signs of trouble—like the request a bank makes when a thief applies for a car loan in your name—will only appear on one of the three reports.

What’s this going to cost me?

By federal law, the credit bureaus can charge you no more than nine dollars and change for each copy of your report. Some states have laws lowering the price for the first copy you order each year.

No matter where you live, you get a complimentary copy if you are unemployed and planning to apply for a job in the next six months, or if you have been turned down for a loan or a job because of a bad credit report. Identity theft victims also have the right to receive a free credit report from each bureau.

Not so free.

If you’re online, you’ve probably seen a lot of offers for “free” credit reports. Watch out—this is a different story entirely. “Free” in this case means either, “we’ll also enroll you in our credit-monitoring service and charge you an arm and a leg,” or “we’re actually identity thieves trying to con you into giving us your Social Security number. To avoid a scam, never give out your personal information in response to an unsolicited e-mail.

Okay, what do I do?

You can order your credit report online, over the phone, or by mail. If you go online, you get to see your credit report instantly, but the process is a little tricky. Although the law says the credit bureaus have to give you your credit report for $9.00 or less, they’d much rather sell you additional services for more money, so don’t just choose the first option you see, which will be the $100 super-deluxe credit-monitoring-plus-credit-score-plus quarterly-credit-report-plus-hot-wax deal. You don’t need all those extras, so ignore the first offer and look around on the website until you find the smaller, less exciting option that says something like “single credit report” or “$9.00 credit report.” You may have to click through a number of web pages to find it. Boring, yes, but much cheaper.

Even harder to locate on the credit bureau web pages is the option for folks who get a free report because they are unemployed, have been denied credit, or are identity theft victims. A cryptic reference, in gray fine print, will be hidden at the top, bottom, or sides of the screen. You might have to pull out your magnifying glass to find it.

Once you do, you’ll learn that credit bureaus aren’t required to give you a free report online. If you live in Georgia or are unemployed, for instance, they can still charge you nine bucks for an online credit report. To get your free or discounted report, you may have to order over the phone, or even by mail. So if you want a free report, skip the online option. The easiest way to find out how to order a freebie is to call each credit bureau and listen to the automated options.

Credit Monitoring Services or Do-It-Yourself?

You may have noticed that there’s no shortage of companies that are simply desperate to monitor your credit. These services promise to keep an eye on your credit, give you regular updates, and alert you if something smells fishy. The catch is the price tag. The average yearly fee for a credit-monitoring service is $100. That’s at least $50 more than you’ll pay if you order your reports yourself. The other problem is that most services only check reports from one credit bureau, which isn’t enough. The only way you can get the whole story on your credit is to look at your report from all three bureaus. For $100, you should get better than 1 in 3 odds!

Is it ever a good idea to use a credit-monitoring service? Yes, if you’re already a victim of identity theft. In that case, it might help (and give you some peace of mind) to have someone else keeping track of your credit from month to month like clockwork, making sure no new thefts have occurred. But even in that case, check up on the credit-monitoring company to make sure it’s legit.

A Look at Your Credit Report

Your credit report reveals a surprising amount of information including:

• Your name, address, SSN, and employment information.
• What credit accounts have been opened in your name, and the current status of those accounts—whether they are active or closed, for instance.
• The balance on each account, how much your monthly payments are, and whether or not you make those payments on time.
• What other companies have ordered your credit report in the past. These prior requests are called “inquiries.”
• Your credit score, which determines your “creditworthiness.” Your score is based on such things as whether you make payments promptly, how much credit you already have, and how long you’ve had various accounts. Creditors look at your credit score as a way to predict whether you will be able to pay your bills on time.

How do they know so much?

Some of this information, your name and address, for instance, comes from public records. The majority of it, however, is reported to the credit bureaus by banks and other businesses that have issued you credit. These companies report to the credit bureaus on a monthly basis, telling them what your balance is and whether you’ve been keeping up your payments.

Creditors also let the credit bureaus know when you—or an identity thief using your information—open up a new credit account. So even if there are no other clues that your identity has been stolen, your credit report can tell you if someone has been obtaining credit in your name.

When you apply for any kind of credit—a car loan, let’s say—the bank checks you out by ordering your credit report. Based on your credit history and score, the bank decides whether or not to approve your loan application. If an identity thief has been using your identity to open bogus accounts, those actions will show up on your credit report and negatively affect your credit score. (And guess what? Identity thieves don’t tend to pay their bills on time…or at all. Big surprise.)

The result? The bank won’t exactly be eager to lend you money. Now don’t you want to know what’s on that report?

Big Bad Credit Reports

Credit bureaus or credit reporting agencies are in the business of being nosy about how quickly and reliably you pay your bills.

Although the name “credit bureau” sounds somewhat official, these agencies aren’t non profit organizations or goverment bureaus.

They’re in it for the dough, just like everyone else. Credit bureaus make their money by selling the information on your credit report to businesses such as banks, savings and loans, credit unions, finance companies, and retailers—who use the info to decide whether they want to issue you credit.