Fair Credit Reporting Act

• The Fair Credit Reporting Act was created to prevent credit bureaus from concealing information in a consumer's credit report. The law mandates that you have the right to view information in your report and receive a free copy of your report if legal action is taken against you based on information in your report or you are denied credit. Since 2005, all consumers are able to receive a free copy of their credit reports each year from each of the three credit bureaus by ordering through annualcreditreport.com. According to the Fair Credit Reporting Act, you also have the right to dispute information included in your credit report.
  
  

Disputes

• Your credit report contains a list of your credit accounts, including the date the account was opened, the current balance, your payment history and whether the account is in good or bad standing. Review all information for each credit account to ensure it is accurate. Removing inaccuracies is the fastest way to clear up your credit report. Any incorrect information in your credit report can be disputed including the amount of your debt, your payment habits or unauthorized accounts.
  
  

Time Frame

• Creditors have 30 days to verify disputed information. If the credit bureau does not receive documentation of the information included in your report within 30 days, the information is removed. There is no limit to the number of times you can dispute an item, but one dispute can take up to four weeks to process. Once it is under review, you cannot dispute the same item until the information is resolved.
  
  

Credit Score

• The extent to which your credit score improves after the removal of derogatory items depends on a range of factors. One of the major factors influencing the improvement of your credit score is payment history. If you are removing late payments or accounts in bad standing, your score improves much more than if you removed a new credit inquiry. Focus on the top three factors influencing your score when repairing your credit report. Those three factors are payment history, amounts owed and length of credit history.
  
  

Considerations

• Disputing items on your credit report can boost your score if you find incorrect information. If the information reported is true, nothing will cure your negative credit ranking except time. Practice responsible credit management by paying balances on time, keeping balances low and maintaining long-term credit relationships. These three factors make up 80 percent of your credit score. Each month you manage your credit responsibly, your credit score improves.