Related topics: banking, credit, credit reports, loans, credit score
It was a long time coming, but you now have the power to get the problem investigated if a merchant puts inaccurate information in your credit reports.
Unless you follow the proper procedures, though, you risk having your request blown off.
If you contact a company with a complaint about information it has supplied to a credit bureau, it is now required to conduct an investigation. The company must notify the credit bureau about the resolution of its investigation, should it uncover data that have been reported inaccurately.
Before the rule change, consumers had no formal right to dispute the accuracy of credit information directly with the company that had reported it. The idea behind the rule change is to increase the accuracy of credit reports, which can determine whether you get a loan, a job or insurance -- and at what cost.
Credit card issuers and mortgage lenders already face some requirements that they investigate information that consumers have disputed about their accounts or payments.
Under the new rules, companies must ensure the information they supply to credit bureaus about you has "integrity," says Andrew Smith of Morrison & Foerster in Washington, D.C.
For instance, if a company makes a report about you to a credit bureau, it must adequately identify you, supply information in a clear and understandable way in a standardized format, and specify the time period to which it relates. It must also report the credit limit on your account.
"One of the purposes of these requirements is to prevent someone who obtains a report from misunderstanding a person's credit history," Smith says.
The changes make it easier for consumers to receive a more thorough examination of disputed information in their credit reports and to have mistakes corrected faster. When credit bureaus receive complaints from a consumer and send them to a lender or merchant for investigation, they typically use a code number to describe the complaints, says Raemon Polk, the executive vice president and a co-founder of L2C, a credit reporting agency. For instance, one code means that the consumer claims an account was closed.
"Often, the (credit information) furnishers don't have a lot of information to go on," Polk says.
