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Money Management (Distributed by the New Jersey Society of Certified Public Accountants)

Check Your Credit Report

There's no denying it: errors can and do appear in credit reports. That's why the New Jersey Society of Certified Public Accountants (NJSCPA) says it's important to request a copy of your credit report at least once a year. You should also check your credit report several months in advance of applying for a mortgage or an auto loan, and before applying for a job or renting an apartment.
A copy of your report can be obtained by calling one of the credit reporting agencies or credit bureaus listed in the Yellow Pages under "credit" or "credit rating and reporting." You also can order a report online. The three national credit reporting agencies are Experian (www.experian.com), TransUnion (www.transunion.com), and Equifax (www.equifax.com). Ordinarily, there is a charge of $8 to $9 per report. Your report is free if you live in certain states, including Colorado, Georgia, Maryland, Massachusetts, New Jersey, or Vermont. In some instances, such as when denied credit, you are entitled to receive a free copy of your credit report regardless of residency. However, you must request a copy within 60 days of the denial. If you are unemployed, receiving public welfare assistance, or believe your credit file contains mistakes resulting from fraud, you also may be entitled to a free copy.

Beware Of Identity Theft
There are two main reasons for errors on credit reports. The first occurs when you are mistaken for another person with a similar name and that person's information ends up in your credit file. As you might expect, those with common names are especially susceptible to this type of error. The other more serious and growing cause of credit report errors is identity theft, meaning someone has intentionally gained access to your personal information and fraudulently obtains and uses credit in your name.

How To Correct Your Credit Report
If you find errors or out-of-date information in your report, contact the credit reporting agency in writing. In addition to providing your complete name, address, and Social Security number, your letter should clearly identify the item(s) in question and explain why you dispute the information. You may want to enclose a copy of your report with the item(s) circled. Include copies (not originals) of canceled checks or other documents supporting your position. You should send your letter by certified mail and request a return receipt.
Once you have notified a credit reporting agency of the dispute, it has 30 business days to investigate and respond. The agency investigates your claim by asking the creditor to review its records.
If the investigation reveals that the disputed information is incorrect or incomplete, the agency must correct, complete, or delete the erroneous information, notify the other national credit bureaus, and give you a free copy of your corrected report. You may ask the reporting agency to send the corrected report to anyone who has requested your file in the past six months. Job applicants can have a corrected report sent to anyone who received a copy for employment purposes during the past two years.
If you disagree with the result of the credit agency's investigation, you are entitled to voice your side of the story by writing an explanation of no more than 100 words. Explain your position clearly and concisely and send it to the credit reporting bureau. The bureau is required to include this statement each time it sends out your report.

Beware Of Promises Of Quick Fixes
CPAs say beware of credit repair companies that claim they can repair your credit for a fee. Nothing could be further from the truth. As a rule, accurate negative information stays on your report for seven years; bankruptcies show for ten years. When the negative information in your report is accurate, only the passage of time can assure its removal.
If you do in fact have credit problems, the best course of action, say CPAs, is to set up a plan for the timely payment of your bills. A credit counseling service may be able to help you prepare a budget or a debt repayment plan. Call the National Foundation for Consumer Credit (1-800-388-2227) for more information.

Published: July21, 2003

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Money Management is a weekly column on personal finance distributed by the NJSCPA.

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