Attack credit-reporting errors.  At Paresco, we are constantly advising people to check their credit reports.  But what should you do if you find an error?  First, you should know that under the Fair Credit Reporting Act, the credit bureaus and any business that supplies them with data are supposed to correct inaccurate information in your report.

One of the major flaws of credit bureaus is how they investigate consumer complaints.  The bureaus go back to the source, and the creditor often just confirms the erroneous information.  Still, it is best to try to get inaccurate information removed from your credit file.  Here is what you should do:

• Tell each credit reporting agency in writing what information you believe is inaccurate and request a deletion or correction.  Provide your complete name and address.  Your letter should clearly identify each item in your report that you dispute.
• Enclose a copy of your report with the items in question circled.
• Include copies (not originals) of documents that support your position.
• Send your letter by certified mail, return receipt requested, so you can prove that the credit bureau received the information.
• Keep records of everything and everyone you talk to.  If you have to start a whole new file cabinet, do it.
• You may need to send your letter to all three major bureaus if the information is incorrect in all of your credit files.  These credit bureaus are:
  
  • Equifax
    P.O. Box 740241
    Atlanta, GA  30374
  • Experian
    P.O. Box 2002
    Allen, TX  75013
  • TransUnion
    P.O. Box 1000
    Chester, PA  19022

Here's what is supposed to happen after you've made your case:

• The law requires credit agencies to investigate disputed information and correct inaccuracies within 30 days of hearing from a consumer.
• The credit bureaus must forward all relevant data you provide about the dispute to the information provider.  But don't wait for that to happen.  Call and then send your own letter with copies of all documents supporting your position to whatever business or creditor is supplying the wrong data to the credit bureau.
• When both the information provider and credit bureau investigations are complete, you must be given written results and a free copy of your report if the dispute results in a change.
• A reinvestigation may not resolve your dispute.  If that happens, ask the credit agency to include your statement of the dispute in your file and in future reports.

If you don't get satisfactory action from the credit bureau, you have at least two recourses.  You can file a complaint with the Federal Trade Commission (www.ftc.gov).  Unfortunately, the Federal Trade Commission does not resolve individual consumer problems.  Nonetheless, your complaint might lead to some law enforcement action.  Your second option is to file a lawsuit.  Be warned that this type of case is hard to win and is costly for the consumer.  But if you have a particularly egregious case, go for it.  You may find a lawyer to take the case on contingency, meaning he would get paid only if you win an award.

When it comes to your credit reports, your best defense is to catch errors early.  Get a copy of your credit report at least once a year.  Check it thoroughly, and immediately dispute any inaccuracies.