Say you've applied for a new line of credit, a new airline miles credit card, or maybe even a house loan, only to find yourself rejected for reasons you can't understand.  You take a good look at your credit report and you find there are entries you don't even recognize, and therefore certainly don't agree with.  You find there are several mistakes on your credit report that may have contributed to your loan or credit card rejection.  How can you correct something that's been listed on your permanent credit report by one (or all) of these huge credit bureaus?  Does this mean your credit is forever doomed?

There's no need to panic, or fly into a rage over mistakes on your credit report.  Unfortunately mistakes on credit reporting are not all that uncommon.  And even though it's a pain in the neck, there are certainly steps you can take to redress the situation and correct mistakes on your credit report.  It's most important to stay persistent, and document all your steps.

Steps to Take to Challenge an Error on Your Credit Report:

There are several steps to challenging an error on your credit report.  Get a copy of your credit report from all three leading agencies.  You can do this online or by phone from each of the big services: Trans Union (800-888-4213); Equifax (888-532-0179) and Experian (800-972-0322).  Analyze each of the three credit reports thoroughly, and make a list of any items you think are questionable or negative.  (Also note any discrepancies among the three). 

Once you've listed any possible mistakes on your credit report, it's a good idea to rank each item according to how damaging it actually is to your overall credit rating—so you'll know where to focus your efforts.  Most damaging to your credit are things like bankruptcy, foreclosure, repossession, loan defaults, court judgments or collections; less damaging to your credit score (though still negative) would be late payments, credit rejections and credit inquiries.  (Having too many inquiries in a short time can be perceived as a problem and will lower your credit rating a bit, although with time this goes away from your credit report on its own).

If you find genuine mistakes on your credit report, you'll want to contact the creditor(s) that made the error, requesting in no uncertain terms that they clear it up and fix your credit report, and asking them to report the credit report mistake or mistakes to the three credit agencies.  If some information on your credit report is unpleasant, but not untrue, then unfortunately you can't erase it because it's not a credit report mistake.  UNLESS you were never notified of the problem; in this case you are entitled to dispute the credit report, thanks to a provision of the new FACTA legislation (which stands for Fair and Accurate Credit Transactions Act of 2003, and which expands on the earlier Fair Credit Reporting Act, or FCRA).  When writing your dispute letter to the credit bureaus, be sure to include a clear explanation of your reasoning, along with any relevant evidence or documentation that helps support your case.

It's up to you. Many people find themselves in the situation of having to challenge a credit report, especially if they find mistakes on their credit report.  The key is to be organized and be polite but stay persistent.  The steps to follow seem easy enough, but you've got to have patience, since the credit bureaus are not always very cooperative.  Clearly your own credit report is your number one concern—and you should treat it as such—but these credit companies and bureaus have got other priorities, so you have to keep at it, and stay on top of things yourself.