The Federal Trade Commission adopted the rules July 1 as part of the Fair and Accurate Credit Transactions Act (FACTA). That’s the same law that lets consumers obtain a free credit report once a year from each of the three major credit reporting companies — Equifax, Experian and TransUnion. In the past, if people found inaccuracies in the information used to determine their credit scores, they had to go through the credit reporting agencies to get the problem fixed. But now they can go directly to the providers of the inaccurate information — credit card companies or mortgage lenders, for example — to get it corrected.

“Under the new FACTA rules, furnishers are now required, in most cases, to investigate disputes that are submitted directly to them by consumers regarding the accuracy of information that furnishers provided to a credit reporting agency,” according to a report by lawyer Stephen Freeland of the Kelley Drye firm in Washington, D.C.

Credit scores are important for people trying to buy new homes or cars. So clearly consumers deserve a simple process to challenge what may be inaccurate information on their credit reports. Whether the new rules truly provide that remains to be seen. As anyone who has dealt with a credit card company or mortgage lender can testify, they don’t always rush to fix mistakes. Contributed By: Dan Weil

Consider these tactics as you consider buying any big ticket item and contact me with home buying questions.

Dispute Errors With the Credit Bureaus

If an individual’s creditor won’t work with him to remedy mistakes, he has the option to dispute the flaw in his credit report with each credit bureau whose files reflect the inaccuracy. Disputing is the process by which an individual states that information in his credit report is incorrect and requests an investigation. All three credit bureaus accept disputes online, via telephone and through the mail. The FCRA requires that each credit bureau conduct an investigation of every legitimate dispute it receives. Regardless of whether the information is verified or removed, a consumer who files a credit dispute can expect a written response from the credit bureau regarding the results of its investigation within 30 days. Again See: The Fair Credit Reporting Act

How Credit Bureau Investigations Work

The sheer volume of consumer disputes that the credit bureaus receive on a daily basis make thorough investigations impossible. Thus, the most common investigation method the credit bureaus use is to contact the information provider and ask if the notation within the consumer’s credit file is correct. This is most frequently done via fax. If the creditor does not respond to the query, or responds that the information is incorrect, the credit bureaus will remove the offending tradeline from the individual’s credit report and notify him of the change.

FCRA Lawsuits Can Help Clear Up Reporting Errors

In some cases, creditors verify incorrect information with the credit bureaus. All creditors are bound by the FCRA to provide only information they know to be true and accurate. If an individual has notified a creditor of the inaccuracy of its report to the credit bureaus and provided documentation to this effect, yet the creditor continues to report the error, it is in clear violation of FCRA guidelines. All individuals have the right to sue their creditors for FCRA violations. Should an individual file a lawsuit, his creditor is likely to immediately request the removal of the error from his credit report since doing so costs the company much less than sending an attorney to the consumer’s area for a legal battle. Although correcting credit reporting errors may be a time-consuming process, the end result is worth the work. Removing damaging credit reporting errors can leave a consumer with a higher credit score. This helps him obtain approval for loans, credit cards, insurance and even housing more easily.

Related articles

• How to Fix Credit Reporting Errors to Improve Credit Scores (consumer-rights.suite101.com)
• Monitoring Sites Draw Credit 'Hypochondriacs' (businessweek.com)

Filed under: Commentary, Credit, Credit Cards, Current Events, Money-Saving, VRN