You've probably heard how important it is to review your credit report once in a while, and to correct any mistakes you find within them.
This much is true, because your reports are used to determine your credit scores. And a bad score can severely harm your chances of getting a mortgage loan, a car loan, or any other type of major financing.
But there is an important concept you need to know before you start reviewing (and possibly correcting) your credit report. The three credit-reporting companies would rather not hear from you, at least when it comes to correcting mistakes. Why? Because you are not their customer, they sell your credit information to lenders -- so those lenders represent their primary customer base. Sure, they also sell credit scores directly to consumers, but this is secondary to the business they do with the lending industry.
On top of that, there is no financial incentive for them to make corrections to your credit reports. They have to spend time to investigate and possibly correct mistakes on a consumer's report, but they do not gain anything from making such corrections. So they spend time and money on this process, with no financial reward. That is the reality of the reporting industry, and it's something to bear in mind if you ever have to request a correction to your credit reports.
They Are Required by Law to Make Corrections
I am not telling you all of this to discourage you from reviewing your credit reports and making corrections wherever needed. On the contrary, I highly recommend that you do that, because it helps you maintain a fair and accurate credit score. I'm only telling you this so you'll understand the mindset and the true motivation of these companies.
You can also take comfort from knowing that these companies are heavily regulated by the U.S. government, under the Fair Credit Reporting Act. There are federal laws that outline how they can operate, how they must interact with consumers, and what actions they must take in the event of a dispute.
Specifically, when you file a dispute about the information within your credit report, the reporting bureaus must investigate your dispute in a timely manner. If they find you are correct in your dispute, or if they are unable to make a determination one way or the other, they must remove the item from your report -- or otherwise correct the erroneous information.
Here's the bottom line. If you have to dispute something on one or more of your reports, you should be persistent until you get results. You can also take comfort from knowing the law is on your side. Just don't expect anything resembling customer service. Now you know!
Brandon Cornett has created one of the Internet's largest libraries of credit advice for home buyers. If you enjoyed the straight-shooting advice in this article, and you would like to read more of the same, please visit http://www.homebuyinginstitute.com/credit.php to learn more.
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