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Fix Those Errors on Your Credit Report

If you've got errors in your credit history, follow these steps to fix them.

If you've been waiting for the dust to settle before you buy a home or take out some other type of loan, you first need to take a close look at your credit report.

About three-quarters of all credit reports contain errors,

according to a 2004 survey

by the U.S. Public Interest Research Group. Some mistakes are serious enough to prevent you from being approved for a loan.

Correcting a mistake can take 30 to 45 days, so you shouldn't wait until you are ready to apply for a mortgage to inspect your report.

You are allowed a free credit report once a year from each of the three credit-reporting agencies (




(EFX) - Get Equifax Inc. Report



), but you have to ask for it.

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There is a one-stop Web site,

, where you can look at your reports online or have them mailed to you.

You can order all three reports at once, or you can space them out every four months to keep tabs on your credit all year long. But if this is your first time taking a close look, you may want to check all three as soon as possible, to make sure none of them have any mistakes.

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If you do find a mistake, here's what you need to do to fix it:

Contact the agency. Not all of the reports will necessarily contain the same mistakes, so contact the relevant reporting agency according to their rules (easily accessible from each agency's home page). All three agencies encourage consumers to submit disputes online, although calling and mailing are also options. (Many consumer organizations recommend putting your dispute in writing in order to have a paper trail.) If you do choose the snail mail option, send a certified letter that clearly states the facts and explains why you are disputing the item. Include a copy of your report with the mistake highlighted. You should also request a "return receipt" with the certified letter so you know when the agency received it. (Here's an example of what the letter could look like.)

Keep track of all correspondence. Make sure you have a clear paper trail of every letter/email/phone call you exchange with the agency. In the case of phone calls, record the name of the person you are speaking to and the time of day of the conversation. Also write down a summary of the conversation, including any advice they provided immediately after the phone call. Don't wait a few weeks to write down what you remember. This way, you have a record of everything that happened, should the dispute involve more serious problems like litigation.

Follow up with the company. If the investigation comes back and your request for a change is refused, or if you just want to work from both sides of the problem, contact the company that supplied the mistaken item on the report. The report includes contact information for each creditor listed on the report, and you should take the same approach with the creditor as with the credit bureau.

Litigation. If you fail to resolve the problem through normal dispute resolution procedures, you may have to sue the agency involved if you believe that they haven't followed the Fair Credit Reporting Act, which requires credit bureaus to correct mistakes. This is your last option for clearing up a costly mistake on your credit report.

One last thing: When submitting any supporting evidence, either to the credit agency or a creditor, it is important to make sure to send in copies -- not originals -- in case anything gets lost.

Peter McDougall is a freelance writer who lives in Freeport, Maine, with his wife and their dog.