Correcting Credit Mistakes

Maintaining a good credit history includes preventing wrong information from appearing on your accounts. Keeping good records and monitoring your accounts will help catch mistakes when they happen.

When charging purchases, keep your sales receipts to compare against your monthly statement. If a billing error occurs, the Fair Credit Billing Act requires the creditor to correct the error promptly and without damaging your credit rating.

A billing error can be any charge for: an unauthorized purchase, an item you refused on delivery, or an amount different than the actual purchase price. Other mistakes include math errors, failure to record payments or other credits to the account, and not mailing the statement to the current address, if such has been provided at least 20 days before the end of the billing period.

To correct or inquire about billing errors, notify the creditor in writing within 60 days of receipt of the statement. State your name, address, account number, the item in question and the date and amount of the error.  By law, the creditor must acknowledge your letter within 30 days, unless the error is corrected in less time. The creditor must correct the error within 90 days of receipt of the letter.

While a billing error is in dispute, the creditor may not report the amount in question to any other creditor or credit bureau. The creditor also may not try to collect that amount until it has answered your complaint. However, if the creditor finds no error, it must promptly send you another statement and may include any finance charges that have accrued.

Once the creditor has answered the complaint, it may take action to collect, including reporting the overdue amount to a credit bureau. If you still disagree, notify the creditor in writing. The creditor must notify the credit bureau of your challenge and the final outcome once the dispute is resolved. During this process, the creditor must give you the names of persons who have received information on your account.

The law also allows you to withhold payment for the purchase of damaged or shoddy goods until the matter is resolved. However, you must make a genuine attempt to work with the merchant in solving the matter.

The Truth in Lending Act limits one's liability for unauthorized purchases made with lost or stolen credit cards to $50 per card. The cardholder, however, must report the lost or stolen card promptly. Keeping a record of all credit cards and their account numbers is helpful in the event this occurs.

Always follow up any action with a creditor in writing and obtain the names and addresses of the persons you dealt with in handling the credit problem.