A credit report contains personal details like name, place of residence and income. It also contains details of how you make your payments, legal history, and financial details about whether you have ever filed for bankruptcy. These credit reports are sold to financial institutions like banks, insurance companies and even corporate companies that are looking at hiring you.

It is foolhardy to assume that since the report is governed by the Federal Fair Credit Reporting Act (FCRA), it cannot have errors. In a cyber world, identity thefts have become common and there is a high chance that someone may have used your Social Security Number or your credit card number to make some purchases or take some loans on your name. If the loan taken under your identity shows that the installments have not been paid, it will generally be recorded in the credit report as a black mark. These errors are something that we can ill afford since the credit reports are used by the receiving entities to check on various aspects. The need to check the credit report arises due to the fact that these reports are used for:

• Deciding whether your loan, mortgage or employment is confirmed or not.
• Calculating the rate of interest that you will be charged for the loan or credit that you have applied for. Note that a bad credit score results in a higher interest.
• Verification of the personal details that you may have provided in the loan or credit application.

In almost all cases the fate of your application depends on how good the credit is. And therefore it is a good idea to periodically ask for your credit report and go through it carefully to ensure that all that has been reflected is accurate and correct. If you want your credit report, all you need to do is to go to Free Credit Report page and request for one.

After you have received your personal credit report, go through it and mark any errors that you spot. Make sure that the errors are genuine and that you have not forgotten some transaction that you have made in the past. Under the FCRA, the reporting company and the information provider (like credit card companies, banks, mortgage companies etc) are required to correct the information once it has been proven that the data provided in the report is incorrect.

What you need to do is this:

• Write to the consumer reporting company and mention the errors in the report clearly (a template of such a letter is appended). Ensure that you point out each and every error that you are disputing.
• Make sure that you attach the relevant documents to prove your point.
• Ensure that you attach only copies of the original documents and not the original.
• Make a formal request for the information to be deleted or modified or corrected, as the case may be.
• It is a good idea to enclose a copy of the credit report with circles or highlights on the data that you are contesting.
• Another precautionary step that you must take is to send your letter through certified mail along with a request for a return receipt.
• If your claims are found genuine, you can also ask for the details of the information provider that provided this inaccurate information in the first place.

There is a process that the reporting companies have to follow on receipt of such communication.

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