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Cleaning Up Credit Inaccuracies

If you’re in the process of trying to get a mortgage, one of the last things you want to discover is an error in your credit history. Unfortunately, errors on credit reports are not uncommon. In fact, according to a study by the Federal Trade Commission, one in five consumers had an error on their credit report.

Fortunately, if you do find an error on your credit report, there is something you can do about it. By law, both the credit reporting agency and the company that provided the information to the credit reporting agency are required to investigate any disputed information.

If you find an error, a dispute letter is the best way to attempt a correction. Dispute letters allow you to request a fix by the reporting agency formally. Though it may take a little time to remove the errors, cleaning up these mistakes can have a direct (and favorable!) effect on your credit score, helping you secure lower interest rates and better terms.
Here’s what you’ll need to include for each discrepancy that you find:

  1. Which account shows the error.
  2. Specifically, what’s incorrect about the account and where it appears in the report.
  3. What item needs to be corrected and why those corrections should be made.
  4. Supporting evidence or documentation which will bolster your claim also

For example: “On my report, the Chase Visa ending in XXXX shows my account is still active. I closed this account in 2012, and it should be shown as closed, not active. Included is a letter from Chase bank, confirming the date of my account’s closure.”

It’s a good idea to keep copies of everything you send. Also, be sure to send the correction to all three major reporting agencies (Equifax, Experian, and TransUnion) and the original creditor (i.e. the credit card company, utility, etc.). You can find the current dispute mailing addresses on these company’s websites. Keep records of your disputes and when/how you communicated with the agencies. Federal law mandates that agencies must help you within 30 days.

Getting your credit in shape is crucial when you’re preparing to buy a home. USA Real Estate and Property Management has assembled a team that specializes in helping people get the home of their dreams. First-time home buyers, purchasing a home with little or no down payment, government grants, and VA loans are all ways that USA can be a valuable resource when buying a home in the Prescott area. Contact them a call at (928) 775-0400 for more information.