Short, plain-English guides to how your credit report works and what the law requires. Each one names the section of law it comes from, so you can check it yourself.
Getting your free credit reports
Start every credit project by getting your reports from all three nationwide credit bureaus: Equifax, Experian, and TransUnion. Each bureau keeps its own file on you, and they don't always match.
The official source is AnnualCreditReport.com, the site the bureaus run under federal law. You can get free reports there from all three bureaus weekly. Be cautious with other sites that advertise "free" reports but require a credit card or sign you up for a subscription.
You're also entitled to a free report if you've been denied credit, insurance, or employment because of your report within the last 60 days, and in certain other situations.
The law: Fair Credit Reporting Act §612, 15 U.S.C. §1681j
What's on your credit report
A credit report is a record of how you've handled credit. Most reports have the same basic parts:
Personal information: your name, current and past addresses, date of birth, and sometimes employers. Errors here can mean someone else's information has been mixed into your file.
Accounts: credit cards, loans, and mortgages, with balances, limits, payment history, and status.
Collections: debts that were sent to a collection agency or sold to a debt buyer.
Public records: today this is mainly bankruptcy.
Inquiries: a list of who has pulled your report. "Hard" inquiries come from applications for credit; "soft" inquiries, like checking your own report, don't affect your score.
Go line by line. Check dates, balances, and account status carefully. A wrong date of first delinquency can keep a negative item on your report longer than the law allows.
How long negative items can stay
Federal law sets limits on how long most negative information can be reported:
Type of information
How long it can be reported
Late payments
7 years
Collections and charge-offs
7 years, starting 180 days after the account first went delinquent
Civil judgments and lawsuits
7 years, or until the statute of limitations expires, whichever is longer
Bankruptcy
Up to 10 years from the date of the order for relief
These limits don't apply to reports pulled for credit or life insurance of $150,000 or more, or for a job paying $75,000 or more a year. Paying off a collection doesn't restart the clock, and it doesn't make an accurate item disappear early.
The law: Fair Credit Reporting Act §605, 15 U.S.C. §1681c
Your dispute rights with the credit bureaus
If you believe something on your report is inaccurate or incomplete, you can dispute it with the bureau for free. Once the bureau receives your dispute, the law sets out what has to happen:
Within 5 business days, the bureau must notify the company that reported the information and pass along the relevant information you sent.
The bureau generally has 30 days to complete a reasonable reinvestigation. That can extend by up to 15 days if you send more relevant information during those 30 days.
If the information is inaccurate, incomplete, or can't be verified, the bureau must correct or delete it.
Within 5 business days after finishing, the bureau must send you the results in writing.
If a deleted item is later put back on your report, the bureau must notify you in writing within 5 business days.
A bureau can decline to investigate a dispute it considers frivolous or irrelevant, but it must tell you why within 5 business days. Clear, specific disputes that identify exactly what's wrong and include supporting documents are the most effective.
If you're not satisfied with the outcome, you can add a brief statement to your file explaining your side.
The law: Fair Credit Reporting Act §611, 15 U.S.C. §1681i
Disputing directly with the creditor
The companies that report your information to the bureaus are called "furnishers." They include banks, credit card companies, lenders, and collection agencies. They have their own legal duties.
Furnishers must not report information they know or have reasonable cause to believe is inaccurate.
When a bureau forwards your dispute, the furnisher must investigate, review what you provided, and report the results back to the bureau.
In many situations, you can also dispute directly with the furnisher in writing, and it must investigate.
Disputing with both the bureau and the furnisher can be useful, especially when the problem started with how the creditor reported the account.
The law: Fair Credit Reporting Act §623, 15 U.S.C. §1681s-2, and Regulation V, 12 C.F.R. §1022.43
Credit reports vs. credit scores
Your credit report is the record. Your credit score is a number calculated from that record at a given moment. You have many scores, because different scoring models and versions weigh information differently, and each bureau's file can be different.
For FICO scores, the general weighting published by FICO is:
Payment history, about 35%
Amounts owed, including how much of your credit limits you're using, about 30%
Length of credit history, about 15%
New credit, including recent applications, about 10%
Credit mix, about 10%
Correcting errors fixes the record. Rebuilding, through on-time payments and lower balances, is what improves the score over time. Most people need both.
How to spot a credit repair scam
Federal law bans the most common credit repair tricks. Walk away from any company that:
Guarantees a certain score, a number of deletions, or a timeline
Asks you to pay before any services are performed
Tells you not to contact the credit bureaus yourself
Says it can remove accurate, current negative information
Suggests you dispute information you know is correct
Offers a "new credit identity" or a number to use instead of your Social Security number. That's illegal and can lead to criminal charges.
Won't give you a written contract, your rights statement, or a 3-day right to cancel
You can report a credit repair scam to the Federal Trade Commission at ReportFraud.ftc.gov.
