What's in your credit report?

According to a survey conducted earlier this year by the Federal Reserve Board, a significant number of banking institutions have tightened lending standards on mortgages, equity lines of credit and credit card loans. A typical lender will rely heavily upon your "credit rating" to determine whether you should be approved. The formula used to determine credit ratings is called Fair Isaac Credit Organization (FICO), and the scores will range from 300 to 900. The lower the score, the higher the risk. Your credit rating is based upon a number of factors including the percentage of credit you are now using, how long you have had debts open, the types of debts you have, and the amounts of your debts and delinquent payments. Your credit report will reveal your FICO score, display credit activities, and indicate actions taken against you due to delinquent debts.

Equifax, Experian, and Trans Union are the three major national credit bureaus that maintain individual credit histories. You are entitled to receive a free report once each year from each of these bureaus. Because reporting to the credit bureaus is voluntary, your credit report with one organization will likely contain information different from reports by the others. Initially, you should request a report from all three. In the future, you can stagger your requests every four months to take full advantage of the free report allowance. For example, you can request a report from Equifax in January, Experian in May, Trans Union in September, Equifax again the following January, and so on. You can request your free report online through www.annualcreditreport.com (a central website maintained by the three bureaus), by calling 1-877-322-8228, or by mail at Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Once you receive your reports, closely inspect your personal information and each entry. To make corrections, send a written letter to the credit bureau, clearly explaining the dispute and requesting that the inaccurate information be removed, corrected or updated. The bureau must initiate an investigation when it receives your letter. It must then notify the entity which provided the information you dispute and provide it with the information you gave. Upon this notification from the credit reporting bureau, the entity must conduct its own investigation. Once that inquiry is complete, the entity must reply to the credit bureau with a report of the outcome. If your dispute results in a change to your report, the credit bureau must provide you with the results, along with a free copy of your new credit report. If your dispute is not resolved, you can write a statement of your continued dispute and have it placed in your credit file.

If you would like help writing a letter to a credit bureau, a creditor or a collection agency, or have any other question about your credit report, you can meet with a legal assistance attorney at your local office for direction and assistance. Region Legal Service Office Southeast legal assistance offices can be reached at 573-3959.