Repairing Credit Scores

Oct 2nd, 2007 @ 6:42 PM by MortgageMentor

Is it really as easy as “they” say to fix your credit score?

Supposedly, if you have a mistake on your credit report, the Big Three credit agencies–Equifax, Experian, and TransUnion–are required to correct the errors. After all, such an error can cause you to be hounded by collection agencies, even if you are not responsible for the so-called overdue payment. And you can even be denied credit because of errors on your report.

In 2003, a law was passed that gave consumers access to a free copy of their own credit report. But the Federal Trade Commission has received numerous complaints about sloppy record keeping on the part of the credit bureaus. In 2006, the FTC had over 255,000 complaints. The Big Three point toward the automation of their system as the problem.

One of the biggest problems happens when someone’s record erroneously contains information that belongs to a another person. Usually the two share a similar name. however, the middle names are often different, and it is doubtful that the social security numbers would be even similar, since often the two live several states apart. So it is rather amazing that in this age of technology these mistakes cannot be overcome.

Anyway, once the record belonging to Citizen A begins to be marred with the credit record of Citizen B, it seems to keep going. The first party’s credit can be completely destroyed if the person who shares their name is something of a deadbeat. They can be denied simple store purchases, mortgages, and student loans.

Reporting the problem to the credit bureau may spark an investigation. Often this doesn’t resolve the issue. Other consumers have gone further, contacting local police, the FTC, the FBI, and the Secret Service–often with little to no results. Even the fraud alert that you can put on your credit report can be ignored by creditors. Once you’ve put a fraud alert in place, it only lasts for 90 days–then you’ll need to renew it.

There is no immediate solution to the credit record problem. As long as there are credit reports, there is the possibility of errors. Even if you have no credit at all, there will still be a record in your name; someone could still be placed on your record by error. Someone could steal your identity. The best thing to do is check your credit record often, and report errors as soon as they arise. Then stay on it; don’t let up until the problem is resolved.