|Gary Foreman is a former Certified Financial Planner (CFP) who currently writes
about family finances and edits
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I am correcting an item in my credit report. I requested the report
from Equifax. Should I also request (and correct) reports from
Experian and Trans Union? I can see a situation where I've corrected
it with Equifax, but a lender uses a different agency. Do these
companies share information?
Curt is right. It is important for
him to have accurate information in his credit report. Negative
comments could make a big difference in the interest rate he pays
for mortgages, car loans and even his credit card balances. And
errors are fairly common. Recent studies show that 70% of all credit
reports contain at least one error.
As a general rule, it's wise to check
your credit report before you apply for credit for a major purchase
or yearly. Checking one credit reporting agency should be enough
unless you've had some problems. But Curt's cases is a little more
complicated. To answer his question we need to know a little about
credit reports and credit rating agencies (CRAs).
As Curt pointed out there are three
major credit rating agencies: Equifax, Experian and Trans Union.
CRAs are a two-way street for your information. They collect
information from member companies about you and put it in your file.
For instance, your credit card company and the people who hold your
home mortgage will send in a status report on your bill-paying
record. Expect that your major accounts will be reported to all
The credit reporting agencies also
provide information about you to member companies who request it. So
if you apply for an auto loan, the prospective lender will contact a
CRA to check you out. The lender can choose to use any of the three
CRAs to get your history.
So let's look at Curt's case. For
illustration, we'll suppose the problem is with the bank that issued
his Visa card. He can expect that problem to show up in all three
credit reports since the bank will work with all three agencies.
So will correcting one report take
care of the others? It all depends on what changes are made to his
report. The first thing for Curt is to deal with the creditor. In
this case Visa. Curt will need to see if they are willing to change
the information that they're reporting to all three agencies.
Perhaps the dispute is over a late
payment and Curt can prove that his check was on time. If Visa
agrees that the original information was wrong they're required by
law to send a correction to any agency that got the original
information. And CRAs are required to share any corrections with
each other. So, one correction would solve the problem.
But suppose that Curt and Visa
disagree over whether his payment was late. Visa doesn't believe a
correction is necessary. They believe the report is accurate as it
stands. Curt is allowed to insert remarks into his credit report
presenting his side of the dispute. But, since what's being entered
isn't a correction, Curt can't count on the Equifax passing it on to
the other agencies. If it's an important dispute, he should send his
remarks to all three agencies.
He'll want to contact each CRA to
find out the proper format for his remarks. He can reach them at:
|| PO Box 740241, Atlanta GA
PO Box 2002, Allen TX 75013; 888-experian
|| PO Box 1000,
Chester PA 19022; 800-916-8800
If Curt feels either the lender or
CRA isn't responding he can report them to the Federal Trade
Commission. To register a complaint with the FTC call
1-877-FTC-HELP. Curt shouldn't expect a personal reply. The FTC is
only looking for a pattern of abuse. They will not get in the middle
of Curt's dispute.
So the key for Curt is whether a
correction or remarks about a dispute is entered in his report. A
correction should be reflected in all three credit reporting
agencies. Remarks would need to be handled separately.
In any case, if Curt is about to
borrow money he probably should check all three reports. It doesn't
take much time or money. And that's really the only way to make sure
that incorrect information isn't costing him extra interest.