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By timestaff
June 8, 2013
White House Photographer Pete Souza photographs President Obama as he meets with a delegation from Canada
White House Photographer Pete Souza photographs President Obama as he meets with a delegation from Canada
Jason Ransom

You may be doing everything right: keeping your card balances well below their limits, always paying bills on time, and watching how often you apply for new loans. Yet you might have a lower credit rating than you deserve.

A recent study by the Federal Trade Commission found that one in 20 consumers could have a meaningful error in a credit report.

These are mistakes that, when fixed, could cause at least a 25-point increase in your score, enough to qualify you for a lower interest rate. “For something so important, this rate of error is too high,” says Chi Chi Wu, a staff attorney at the National Consumer Law Center.

The credit industry frames the numbers differently: 95% of consumers don’t have a problem. Either way you slice it, a 5% chance of a big error is enough to justify vigilance. If you are part of the unlucky minority with a flawed report, the onus is on you to persuade the mistaken credit bureau to fix it. Here are the steps to take to ensure you have the score you deserve.

Get a checkup — and don’t pay

Start by making sure you know what each of the big three bureaus — Equifax, Experian, and TransUnion — is saying about you. (Their reports, and thus their mistakes, can differ.) Unless you’ve already had recurrent problems with your file, avoid credit monitoring services, which can run $180 a year. Even though many are owned by the bureaus themselves, all they do is alert you to an error after the damage is done, says Ed Mierzwinski of U.S. PIRG, a consumer advocacy group. You can get the same info for free once a year at

Request all three reports now if you’re vying for a new job or mortgage. Not planning to apply for new credit anytime soon? Practice good housekeeping by requesting one report every four months from a different bureau.

Watch for mistaken identity

Look for three kinds of errors:

First: Incorrect information, such as on-time payments listed as late, on accounts you know you have.

Second: Unfamiliar addresses or odd variations of your name; these don’t affect your credit, but might suggest your information is being mixed with someone else’s.

Third: Keep records of debts you didn’t rack up or credit inquiries for loans you never applied for.

If you suspect identity theft, call the bureau immediately and ask to put a fraud alert on your file. (For further action, go to Bad info about another person can also get on your report by mistake, however. “This is by far the most difficult error to get fixed,” says John Ulzheimer of

Whatever is causing the confusion — say, you share a similar name and Social Security number with someone — can have a way of popping up again and again.

Idiot-proof your dispute

You can submit an online dispute with the credit bureau, but experts say you may be better off using the mail so that you can attach documentation. Include a highlighted copy of your report, a typed explanation of what’s wrong, and copies of relevant documents.

“Keep your explanation simple,” says Gerri Detweiler of “Don’t send 12 pages of letters and unlabeled documentation and leave them to figure it out.” Send everything via certified mail and request a return receipt.

Send the same information to the lender or debt collector. It must investigate too, but it currently won’t get any of your supporting documents from the bureau. (That will change this year, bureaus say.) Find the address on your credit report.

Is there hope of this becoming a more customer-friendly process? Maybe: The new Consumer Financial Protection Bureau has been given power to regulate the industry. It remains to be seen, though, how tough they’ll be.