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How to Undo Unfair Credit Reports

If you are like most well-to-do individuals, you pay your bills on a regular and consistent basis. Yet despite your history, you could be turned down for a loan because of “bad credit.”

How can that be? Maybe your credit report is at fault. This is the record compiled by credit bureaus and sent to creditors who want to check on a prospective customer's payment history. The system isn't foolproof, so your report may contain inaccuracies.

Your credit report contains information on where you live, how you pay your bills and if you have ever been sued or arrested, or filed for bankruptcy. The three major nationwide reporting companies—Equifax, Experian and TransUnion—sell the information to businesses that use it to evaluate your credit applications.

If you think you have been wrongly denied credit, contact the creditor that turned you down and find out which credit bureau was used to check your credit history. Under a recent amendment to the Fair Credit Reporting Act, each nationwide consumer reporting company must provide a free copy of your credit report upon your request (but no more than once every 12 months).

You might send the credit bureau a written statement briefly explaining your situation. The credit bureau usually has 30 days to investigate the claim. Afterwards, you should receive a written report on the results.

Final words: Don't ignore credit history problems. They won't go away all on their own.

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