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How Time Affects Your Credit Report

Summary: Learn how credit reports work, how long debt remains on them and how to correct errors.

There are no quick or easy cures for a poor credit history. If a credit repair company promises you it can clean up your credit report, remember the following:

your credit history is maintained by private companies called credit bureaus that collect information reported to them by banks, mortgage companies, department stores, and other creditors;
these credit bureaus can legally report accurate negative credit information for seven years and bankruptcy information for ten years;

accurate items that are within the seven (or ten) year reporting period cannot be erased from your credit record by companies advertising "credit repair" services;
if you have a poor credit history - even if your past problems were due to illness or unemployment - time is the only thing that will heal your credit report;
the only information in your credit report that can be changed are items that are actually wrong or beyond the seven (or ten) year reporting period;
if there are genuine mistakes or outdated items in your report, you can fix them yourself.

IN FACT, YOU CAN DO ANYTHING A CREDIT REPAIR COMPANY CAN DO - FOR FREE OR FOR ONLY A FEW DOLLARS.

WHAT'S IN YOUR CREDIT REPORT?

If you're having trouble getting credit, try checking your credit report yourself. The credit report tells how you've managed your credit in the past. Companies examine your credit report before deciding whether to give you credit. When a company denies your request for credit because of your credit report, it must tell you so and identify the bureau that supplied the report.

Credit bureaus are required by law to share with you any information they have on file about you. You can find out what's in your credit report by taking the following steps:

1. Contact local credit bureaus. You can find them listed in the telephone Yellow Pages under "Credit Bureaus" or "Credit Reporting Agencies." Your local bank or retailer may also be able to identify them.
2. Ask for a copy of your credit report. There may be a fee of $5 to $20, but if you've been denied credit within the past 30 days, your credit report is free.
3. Most credit bureaus will mail you a copy of your report. Under the law, you also have the right to visit their offices to review your credit report in person.

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HOW TO CORRECT MISTAKES IN YOUR REPORT

Review your credit report for any mistakes or information more than seven years old (ten years for bankruptcy). If you don't understand something, ask. The credit bureau is required by law to explain your report to you. If there are mistakes, you can take the following actions:

1. Notify the credit bureau of the problem and provide as much information as you can about what is wrong with the report. The bureau must-at no charge to you-reinvestigate the disputed information. It then must correct any mistake or delete any information it cannot verify. At your request, the bureau must send a corrected copy of your report to anyone who received the incorrect version within the past six months.
2. Sometimes, it is also helpful to contact the creditor directly to ensure that the creditor's records are correct.
3. If these steps don't resolve things, you can file a written statement of up to 100 words with the credit bureau explaining your side of the story. This explanation will be included in your credit report.

For More Help:

CONTACT:

Federal Trade Commission
Credit Practices Division
Washington, D.C. 20580

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