Rebuild Your Credit

When you first receive your Trans Union and Equifax credit reports, you will be totally lost.

The information is coded in a way that is not immediately readable by the average consumer.

Each credit report should arrive with a key that interprets the codes and indicators on the credit report. Sit down with the credit report and the key and study it until you understand what each number and code means.

Gather a yellow and orange highlighter pen. Whenever you identify a negative listing, mark the listing in yellow on your scratch copy of the credit report.

Very often, it is difficult to tell if an item on the credit report is negative or positive. The following table will help you identify every negative listing on your credit reports.

Negative Credit Indicators

If the listing contains one or more of these indicators, then the listing is negative. If the listing contains none of these indicators, then the listing is positive.

Experian Credit Report

Any item marked with an asterisk any inquiry

Trans Union Credit Report

Any item rated higher than I1, M1, or R1
.
Any item listed as repossession, foreclosure, profit and loss charge off, write off,
paid profit and loss write-off, paid charge off, settled, settled for less than full balance, or included in bankruptcy

Any collection amount, whether paid or not.

Any court account, including a lien, judgment, bankruptcy chapters 11, 7, or 13, divorce, satisfied lien, or satisfied judgment.

Any item showing one or more thirty, sixty, or ninety day late payments in the column to the far right.

Any inquiry.

Equifax Credit Report

Any item rated higher than I1, M1, or R1 (such as R2 or I9).

Any item proceeded by a ">>>>" icon.

Any item listed as repossession, foreclosure, profit and loss write-off charge-off, paid profit and loss write-off, paid charge off, settled, settled for less than full balance, or included in bankruptcy.

Any collection amount, whether paid or not.

Any court account, including a lien, judgment, bankruptcy chapters 11, 7, or 13, divorce, satisfied lien, or satisfied judgment.

Any item showing one or more thirty, sixty, or ninety day late payments in the column to the far right.

Any inquiry.

Those I2 and R9 codes - what do they mean?

R- Revolving (usually a credit card)I - installment (like home or auto loan)

R1 or I1 = pays as agreed never late R2 or I2 = 30 days late R3 or I3 = 60 days late R4 or I4 = 90 days late R5 or I5 = 120 days late R7 or I7 = making regular payments under wage earner plan R8 or I8 = repossession R9 or I9 = charge off

Correcting Errors Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the consumer reporting company and the information provider.

Step OneTell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (NOT originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Send your letter by certified mail, “return receipt requested,” so you can document what the consumer reporting company received. Keep copies of your dispute letter and enclosures.

Consumer reporting companies must investigate the items in question—usually within 30 days—unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file.

When the investigation is complete, the consumer reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. This free report does not count as your annual free report. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provider.
If you ask, the consumer reporting company must send notices of any corrections to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If an investigation doesn’t resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.

Step TwoTell the creditor or other information provider, in writing, that you dispute an item. Be sure to include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct—that is, if the information is found to be inaccurate—the information provider may not report it again.

Adding Accounts to Your File Your credit file may not reflect all your credit accounts. Although most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors supply information to consumer reporting companies: some travel, entertainment, gasoline card companies, local retailers, and credit unions are among the creditors that don’t.

If you’ve been told that you were denied credit because of an “insufficient credit file” or “no credit file” and you have accounts with creditors that don’t appear in your credit file, ask the consumer reporting companies to add this information to future reports. Although they are not required to do so, many consumer reporting companies will add verifiable accounts for a fee. However, understand that if these creditors do not report to the consumer reporting company on a regular basis, the added items will not be updated in your file.

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.