Kaizen Credit Improvement: Fix mistakes in your credit reports

Don’t leave your finances to the mercy of credit-reporting companies. Use continuous process improvement (yours!) to set the record straight. Third in a series.

Consumer Finance Protection Bureau HQ in Washington, D.C., current regulator of credit reporting bureaus. (Credit: Payton Chung via Flickr, CC 2.0 license)

WASHINGTON, July 16, 2015 – You’ll regularly find advice about reviewing your credit reports all over the Internet. But how many resources provide you with specific advice about how to do it? We do.

Read on for our success-guaranteed details. Successful, that is, if you follow our 5 easy steps.

  1. What to do when you get your report. Don’t start with your personal data. Grab a highlighter and head for the instructions for correcting inaccuracies and omissions on your report. Highlight the info you think applies to you. This will save you from having to go through all your personal stuff, looking at all the fine print instructions at the end, freaking out, calming yourself as best you can, and then going back through your personal stuff to figure out how it applies and what to do about it.

Hang on to your trusty highlighter. Done with those instructions? Now it’s time to go through your personal stuff.

  1. Inspect the five basic information categories. Regardless of the layout of the report, it will include five basic informational categories you’ll want to inspect: personal information, credit accounts, credit inquiries, collections and public records.

Go through each and highlight anything you know to be wrong in these categories. Then use a brightly colored pen—any color except black or blue similar to the print on the report—to write in whatever corrected information you have available.

For anything else, look through your personal records and enter the right info on your copy of the report. During this process, you’ll find that those highlighted areas with no writing on them will stand out, calling plaintively for information like little data elves and making it easy for you to look up what you need to fill in the blanks.

  1. 3. List the errors as requested. Don’t skip anything or decide it’s not important. The accretion of detail matters. In fact, that’s how your credit score gets calculated—via the accretion of detail over time. So don’t omit incorrect information just because an inattentive or bored assistant at the reporting agency got it wrong sometime back in the day.

An example: I just noticed my TransUnion report states I live in Apartment C at my primary address. Wrong! I don’t want lenders assuming I live in an apartment or a condo when I actually live in a townhouse. That’s especially in our current tougher credit environment if I’ve decided to go for a mortgage refinancing.

  1. Double check your responses, and make sure you followed the directions exactly. Keep copies of everything—your annotated report and any paperwork you submit to correct it, including screenshots of information you provide online. If you hate paper, make PDF files of the information and put them in a folder on your computer.
  1. Send in your corrections/emendations. Then wait. But not too long. After you send the agency your corrections, your next important task for the next four months is to hold the agency’s feet to the fire with as little expenditure of your personal energy as possible. Mark your calendar in advance for any dates by which information is promised. Call weekly if response deadlines are missed. Call if information is ignored or incorrectly altered. Be cheerful and relentless, with stronger emphasis on cheerful. Righteous indignation on your part will only win you more stonewalling in the end. It’s how life works.

Start again at Step 1 and repeat for the next report.

Kaizen Is Still Your Friend

Remember: Kaizen (kai = change; zen = good).

The reason you have so many rights under the law is because many wrongs were done to individuals’ credit reports over the years—so many that the Feds decided they had to wade into the mess and try to sort it out. If the credit-reporting companies couldn’t do it right, they seem to have figured, at least little guys like us can fix it for ourselves.

Keeping your credit report accurate is, in a way, almost as important as voting. Both are rights and responsibilities that will not go into effect unless they are exercised. By us. Do both, and it will be hard to go wrong.

You may not elect exactly the person you would ideally want to be President in the next campaign. But if you stay on top of your credit information, you can work wonders on improving your credit reports. And you’ll be well on your way to improving your credit score as well.

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