Your credit report contains extremely personal and detailed information about you and your finances. Where you live, if you pay your bills on time, if you’ve filed for bankruptcy, foreclosure or if any lawsuits or court judgments were filed against you.

Many people are unaware that it’s common for credit reports to have errors. The more common a person's name, the higher the chance of having errors. However, accurate negative information cannot legally be removed from your record until it has been there for a certain amount of time.

The following actions that negatively affect your credit are:

• Bankruptcy
• Foreclosure
• Repossession
• Loan Default
• Court Judgments
• Collections
• Past due payments
• Late Payments
• Credit Rejections
• Credit Inquiries

The three nationwide consumer-reporting agencies or bureaus that collect this information are: Equifax, Experian, and TransUnion. These agencies collect this information about you; sell it to your creditors, potential creditors, employers, potential employers, potential landlords and any business that evaluates your creditworthiness for any reason whatsoever.

Individuals remain protected under the federal Fair Credit Reporting Act (FCRA), which promotes the accuracy and privacy of the information in the files of the nation’s three credit bureaus. Laws are in place stating that information stored and shared in your credit report must be correct and kept private.

The information in this report determines if you are able to borrow money, how much interest you’ll pay on a loan and if a potential employer will hire you. It can also alert you to identity theft. Consumer advocacy groups and financial experts strongly recommend reviewing your credit report regularly for errors.

Accurate negative information normally remains on a credit report for seven years—ten years if you’ve filed for bankruptcy. If blemishes on your report are correct, there is nothing you can do to immediately remove it. The best way to begin to repair your credit is to pay our bills on time.

Obtaining a Copy of the Credit Report

Under federal law, you are entitled to receive a free copy of your credit report from each agency every 12 months—at your request. This law is enforced by The Federal Trade Commission.

Equifax, Experian, and TransUnion have together set up one website, toll-free telephone number, and mailing address through which you can order your free annual report. To order online, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, Post Office Box 105281, Atlanta, GA 30348-5281. Do not contact the three bureaus individually. Free annual credit reports are conducted and obtained through the above-mentioned contacts only.

If a company takes adverse action against you, such as denying you employment, insurance or credit application, under federal law, you are entitled to receive a free credit report. Your request for the report must be within 60 days of receiving notice of the negative action against you. The company that reported the negative information will be on your report.

Correcting Errors

Federal law provides that any bit of information that is not correct on your credit report must be corrected by the provider of the information (the company that reported the information), and the credit bureau reporting the information.

Write a letter to the credit bureau reporting the error explaining why the information is incorrect and that you want the information corrected or deleted. Include a copy of your credit report circling the error(s); along with copies of any documentation supporting your claim. Send this letter and copies of the documents certified mail, “return receipt requested,” so you’ll have proof of what you sent. Always send copies of everything, while you keep originals for your records.

Once the review of your claim is complete, the credit bureau must provide the results to you in writing, along with a copy of your credit report if a change was made. The disputed information cannot be placed back on your credit report unless the company verifies its accuracy later down the road. The credit bureau also must send you written notice if that happens, including the name, address, and phone number of the information provider.

By law, credit bureaus must investigate your claims — usually within 30 days — unless they consider your claim frivolous. If you receive a letter from the credit bureau warning you that frivolous claims are illegal, they may not be taking your claim seriously. If you are absolutely sure the information is false on your credit report—insist they investigate your claim.

The credit bureau must send the information you provided to the company that reported the mistake. The company must review the claim and report their findings back to the credit bureau—one way or the other. If the review results in the removal of the error, the company must report its findings to all three credit bureaus to set the record straight in your credit file.

The credit bureau is obligated to send notices of the correction to anyone that received a copy of your credit report within the last six months, or two years for employment purposes—at your request.

If the investigation doesn’t result in settling your claim, you can either ask the credit bureau to include your dispute in your credit report, or file a claim with the Federal Trade Commission. You can visit ftc.gov or call toll free 1.877.382-4357 for more information on submitting a claim.