FLM Step 6: Andy Jolls on how to clean up your credit report

In honor of Financial Literacy Month, we created a microsite that offers 30 simple steps to financial wellness--one for each day of the month. To enrich the experience, we asked some amazing people to guest post during the month on a topic that is related to the day’s step. Their dedication to financial literacy is truly inspiring! Today, Andy Jolls, creator of VideoCreditScore and former FICO® exec, discusses how to clean up your credit report.

Many of us have score impacting errors on our credit reports. In fact, this is the reason that a good number of us can have a 50 point swing in our 3 credit scores from the three credit reporting agencies. Since it's a lot easier to correct bad data than to change your actual behavior, this is an important early step towards credit management.

Your most effective weapon in dealing with the credit bureaus is the Fair Credit Reporting Act (FCRA). You can read it if you'd like but here's the skinny. Legally, the FCRA protects you by requiring credit bureaus to furnish correct and complete information to companies requesting credit histories for evaluation. If you find an error on your report, simply follow these steps:

  1. Write to the credit reporting agency disputing the item and include any supporting documents. Keep a copy of all documents for your files. Here is a sample letter. Send these letters certified mail return receipt requested.
  2. When the credit reporting agency receives your letter disputing the item, they must investigate the item in dispute (usually within 30 days) by presenting the information you submit to the creditor.
  3. By law, the creditor must review your evidence and report its findings to the credit bureau.
  4. The credit bureau must then give you a written report of its investigation and a copy of your report if the report results in a change.
You can also fill out an online dispute form provided by the credit bureaus. But, I prefer offline filing as it allows you to keep a paper trail. The Web sites for the three major credit bureaus are: If an item on your report is found to be an error and is corrected, you can request that the credit bureau send corrected copies of your report to any creditor who received your report in the previous six months or any employer who received your report in the previous two years. If you are not satisfied with the results of a formal dispute, you can also seek resolution with the source of the information. To do this, write to the creditor disputing the incorrect entry. After receiving your letter, the creditor may not report the information without including a notice of your dispute. In addition, once you have notified the source of the error in writing, it may not continue to report the information if it is an error. Do not use a company to do this for you. Many companies charge a lot of money and all they do is get power of attorney and write letters on your behalf. Stay away from companies that call themselves "credit repair" companies. When it comes to credit repair, listen to the FTC, who says "do it yourself".

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.