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How To Dispute Errors in Your Credit Report, Improve Credit Rating

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information generally can stay on your report for seven years. There are certain exceptions:

Bankruptcy information may be reported for 10 years. Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

Information about criminal convictions has no time limit. Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

Default information concerning U.S. Government insured or guaranteed student loans can be reported for seven years after certain guarantor actions.

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations within your state runs out, whichever is longer.

Seven-year Reporting Period

There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

With regard to any delinquent account placed for collection—internally or by referral to a third-party debt collector, whichever is earlier—charged to profit and loss, or subjected to any similar action, the seven-year period is calculated from the date of the delinquency that occurred immediately before the collection activity, charge to profit and loss, or similar action.

For example, assume that your payments on a loan were late in January, but that you caught up in February. You were late again in May, but caught up in July. You were again late in September, but did not catch up before the account was turned over to a collection agency in December. You made no more payments on the account, and it is charged to profit and loss in July of the following year.

Under the "Fair Credit Reporting Act," (FCRA) the January and May late payments each can be reported for seven years. The collection activity and the charge to profit and loss can be reported for seven years from the date of the September payment, which was the delinquency that occurred immediately before those activities.

Adding Accounts to Your File

Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to CRAs: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't.

If you've been told that you were denied credit because of an "insufficient credit file" or "no credit file" and you have accounts with creditors that don't appear in your credit file, ask the CRA to add this information to future reports.

Although they are not required to do so, many CRAs will add verifiable accounts for a fee. However, understand that if these creditors do not report to the CRA on a regular basis, the added items probably will not be updated in your file.

To learn your full rights under the FCRA, visit www.ftc.gov/credit.

Next: "How to read and understand your credit report"

Credit Repair: Fix Your Own Credit Report


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