Do You Know What is in it?

Your credit report will be thoroughly reviewed during any thorough background investigation.  This can be an opportunity to shine or it could mean the end of your candidacy.  The time to take measures to improve your credit report is now, before you're knee deep in a background investigation.

In a study by the Public Interest Research Group it was reported that over 70% of credit reports contain errors. 

Since it takes time to have anything changed on a credit report, the time to take action is now.

What is in Your Credit Report

The first step to improving your credit is to identify what exactly your credit report contains. 

Now, there is not just one all-encompassing, super credit report.  In fact, there are three main credit reporting bureaus.

Equifax
Trans Union
Experian (formerly TRW Credit Bureau)

Each of the three offer a different credit report based on the information they independently receive, so it's important to have an idea of what all three credit reporting bureaus are saying.  If you don't want to get all three, at least get one.

Besides the actual data, you are given a credit score based on a culmination of all your credit activities.  Generally, the credit bureaus use a scale for credit scores which runs from 330 to 830.

There are Errors in My Credit Report

Okay, this is good.  It is good that you learned this now and not when in front of an interview panel for a job.

In your credit report are the names and (most of the time) the telephone numbers of the entities reporting both good and bad credit activities.  Often, a telephone call and maybe sending documentation to support you position will solve the problem.

In instances where this does not remedy credit report errors, you have recourse.

Below is an excerpt from the US Federal Trade Commission which addresses errors on a credit report:

Under the Fair Credit Reporting Act, both the credit reporting agency and the organization that provided the information to the credit reporting agency, such as a bank or credit card company, have responsibilities for correcting inaccurate or incomplete information in your report. To protect all your rights under the law, contact both the credit reporting agency and the information provider.

First, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the sample below. Send your letter by certified mail, return receipt requested, so you can document what the credit reporting agency received. Keep copies of your dispute letter and enclosures.

Credit reporting agencies must reinvestigate the items in question--usually within 30 days--unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the credit reporting agency, it must investigate, review all relevant information provided by the credit reporting agency, and report the results to the credit reporting agency. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide credit reporting agencies so they can correct this information in your file. l Disputed information that cannot be verified must be deleted from your file.

• If your report contains erroneous information, the credit reporting agency must correct it.

• If an item is incomplete, the credit reporting agency must complete it. For example, if your file showed that you were late making payments, but failed to show that you were no longer delinquent, the credit reporting agency must show that you're current.

• If your file shows an account that belongs only to another person, the credit reporting agency must delete it.

When the reinvestigation is complete, the credit reporting agency must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the credit reporting agency cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the credit reporting agency gives you a written notice that includes the name, address, and phone number of the provider.

Also, if you request, the credit reporting agency must send notices of corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the credit reporting agency to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the credit reporting agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting agency, it must include a notice of your dispute. In addition, if you are correct-that is, if the disputed information is not accurate-the information provider may not use it again. Accurate Negative Information When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years. There are certain exceptions:

• Information about criminal convictions may be reported without any time limitation.

• Bankruptcy information may be reported for 10 years.

• Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

• Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.

So you see, even the Government takes this seriously.

Confirm that Credit Report Errors Were Repaired

Do not take anyone's word for it.  Obtain a recent copy of your credit report to make sure that errors were fixed.

How can I Obtain a Free Credit Report

Good question.

Each of the top three credit bureaus mentioned above - Equifax, Experian, and TransUnion - is required to provide you with a free credit report, at your request, once every 12 months. From them you may obtain an online credit report or a credit report via regular mail.

Credit Report