10 Jun The Truth About Fixing Errors on Your Credit Report
The Fair Credit Reporting Act (FCRA) regulates credit bureaus to ensure that all information they report is accurate. Of course, the FCRA can’t go in and monitor all of these reports. Instead, it encourages people to check their reports for inaccuracies. To make that easier, the government added the Fair and Accurate Credit Transactions Act to the FCRA. This amendment allows consumers to receive a free copy of their credit report from the three major credit bureaus one time a year.
Knowing that you can get a free report and dispute errors is one thing, but knowing how it works is another. Let’s look at the truth behind fixing those annoying errors on your credit report.
Disputing Isn’t Always Easy
Everyone can dispute and try to fix the errors on their credit reports, but not everyone gets the results they want. In a study conducted by the Federal Trade Commission (FTC), it was found that 70 percent of people who dispute items on their credit reports aren’t happy with the results. The items are still there, at least to a degree, and they don’t think they should be. Unfortunately, half of those people will abandon the process because they don’t believe it works for them.
While the study doesn’t state the reason behind this issue, it’s likely because people don’t know what they are doing when disputing the error. It would be interesting to see if a credit repair agency could help them get the outcome that they want. It’s highly likely that if they took the problem out of their hands and put it into someone else’s, they would be able to get the desired outcome.
Negative Items Can Come Back
In the same study, 1 percent of consumers who had negative items removed had them reappear after some time. This is very upsetting to consumers. They go through all of the work to have something removed, and then the creditor finds a way to add it back to the credit report. It’s like taking two steps forward and then two steps back. Credit repair professionals are trained to look for items to remove and then fight to keep them off for good. If you go at it by yourself, you will need to continue to dispute the item to get it removed once gain.
Fixing Your Credit Reduces Your Risk Profile
Many people believe that fixing errors on a credit report is all for naught, but that couldn’t be further from the truth. In reality, when negative items are removed from your report, your score goes up – just like that. It happens within months. In the FTC’s study, 20 percent of people who had negative items removed ended up in a different risk tier. They were viewed as less risky by simply getting items removed.
The Process Can Take Several Months
Creditors have 30 days to respond to disputes and, if they can’t prove the item is accurate or valid, it is removed from your report. Because of that, your score can go up immediately. However, it can take several months for you to reap the benefits of credit repair, so if you plan to make a big purchase with credit in the near feature, it’s a good idea to get started immediately.
Now that you know the truth about fixing errors on your credit report, you should understand why it’s so important. You don’t have to let credit errors bring your score down. You’re in control of the process. Start disputing errors so you can improve your credit quickly.