A FICO score is a report card of a person's creditworthiness. However, the credit bureaus that calculate your score aren't perfect, nor are the creditors who report your activities to them. Fortunately, if you are on top of the situation, the process for contesting erroneous items in your credit report is fairly straightforward.
Fair Credit Reporting Act
For the most part, if you borrow money through purchases made on a credit card or for a student or auto loan, for instance, and you pay your bills on time, your FICO score will take care of itself. However, because credit bureaus and the information they gather are often imperfect, Congress has enacted the Fair Credit Reporting Act. The FCRA requires the three nationwide consumer credit reporting companies to, upon request, issue to you a free credit report once every twelve months, or annually. If you successfully challenge a discrepancy in your report, the reporting agency must correct the error within 30 days.
A Blanket Challenge Might Raise Red Flags
Making a blanket challenge to everything contained in your report, however, carries risks. The one exception to the credit bureaus being required to investigate a discrepancy is when your request is deemed to be "frivolous." You've no doubt seen the ads for credit repair companies that promise to get you out of debt or repair bad credit. A tactic popular among some of these companies is to challenge every item in a credit file in the hope that an overwhelmed credit bureau might remove the information without verifying your claim.
Increase Your Chances for Success
It's worth noting, once again, that you have every right to contest discrepancies in your credit report. Still, even if you have a supportable beef regarding every negative item in your report, you will still be well served to provide meticulous detail regarding the reasons for the discrepancies. If your claim is dismissed as frivolous, the credit reporting agency in question is required to notify you within five business days. At that point, you are allowed to challenge discrepancies again, but having been refused once, it is unlikely that you will succeed in having the contested items removed from your report.
Don't Celebrate Prematurely
Even if the credit bureau removes information that it had the right to include in your file, it's likely to be a temporary condition. When notified that a legitimate item has been removed, the creditor that first reported the information to the credit bureaus will almost certainly report it again. Valid credit deficiencies will most likely reappear within 30 to 60 days.
Mike Gonyea served as an account manager and strategic planner at a Detroit advertising agency for 20 years. He has covered automotive finance, state and local government and interfaith issues for publications and websites including “The Detroit News,” American Thinker and A Common Word.