Text size:

Fighting credit report fraud

By Lauren Johnston | amNY.com

Late credit card payments, a steep debt-to-income ratio or rejected loan applications they all smudge credit reports and turn basic business transactions and even job searches into nightmarish tangles of red tape. And if the negative information is accurate, it stays on your credit report for seven years. No exceptions.

But how about when it's a mistake or even fraudulent? Millions of Americans are victims of identity fraud each year there were 8.9 million cases totaling $56.6 billion in 2006, according to a joint study by the Better Business Bureau and Javelin Strategy and Research group.

And many times, that theft results in a ravaged credit report and rating. So, how do you go about restoring your good name? amNewYork spoke with experts at the Federal Trade Commission and TransUnion credit reporting agency to find out.

Check your credit health

"Consumers should think about managing their credit health in much the same way they manage their general health," said Steven Katz, of TransUnion's TrueCredit.com. That means get check-ups. Go to www.annualcreditreport.com, the only FTC-approved source for free copies of your credit report. Federal law allows to you to obtain one free report per year from each major credit union: TransUnion, Equifax and Experion.

Know your rights
The federal Fair Credit Reporting Act offers many protections for consumers including provisions to help remove credit report errors. Warning though: it's a long process.

The first step is communication. If you detect misinformation, write a letter to the credit union immediately. Explain your dispute and request that the information be corrected or removed. Be sure to include photocopies of documents supporting your claim. Always keep the originals.

To see a sample dispute letter, go to: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.htm

The FTC suggests sending the letter certified mail to keep a paper trail of all correspondence with the reporting agency. Then the agency investigates and you wait.

"They must correct or delete inaccurate, incomplete or unverifiable information, usually within 30 days," said FTC spokesman Frank Dorman. But certainly it requires persistence on the part of the individual.

Once inaccurate information has been removed it can't be reported again. And to help rebuild your credit rep, federal law states that, at your request, credit unions must send corrected reports to anyone who received a bad one.