Did you know that as many as 20% of Americans have a mistake on their credit report? And 5% are actually getting overcharged for their credit cards, auto loans, insurance policies and more because of it. That’s according to a study that was made in 2012 and issued by federal regulators.
You can dispute and fix credit report errors and have them removed from your record in 4 steps:
Step 1: Check Your Credit Report
The first thing is that you have to actually look at your credit report. There are three major reporting bureaus, Experian, Equifax and TransUnion. And you’re entitled to a free copy of each of their reports every 12 months. You just request it through AnnualCreditReport.com. Then, check these things:
- Incorrect address or employer
- Incorrect spelling of your name
- Open accounts being reported as closed
- Outdated information
- Only your accounts are listed in your account history
- Negative information that is outside of the reporting limit
- Accounts that you have are all listed
- Bad debts that are required to be removed have been
- All bankruptcy debts that have been discharged are marked appropriately
- Inquiries are accurate
If any of the information in these areas or any others are incorrect or even incomplete you want to look at each report to see which ones are reporting it. If the information is on all of your reports you’ll need to approach all of them. Also, if it’s not then you only need to look at the ones that are showing. Not all of your reports are going to look exactly the same.
The next thing you’re going to need is evidence of what you’re going to show them. You need documents that are related to the accounts or information and you need to have multiple copies available. The first time you send those copies out you may not get a response and you’ll have to try again.
Step 2: Contact The Bureaus
As soon as you know about an error you want to make sure you contact the bureau that’s reporting it. The Consumer Financial Protection Bureau recommends that you reach out to them directly. With each of these bureaus, you’re going to have the opportunity to report a dispute either online or through the mail. But when you send out that dispute makes sure you do each of these things:
- Make sure to include your full name, address, date of birth and social security number
- Include previous names and addresses that were used at the time of the disputed information
- Include all information about the account you are questioning including address, account number, account opening, creditor name, etc.
- Instructions on what is incorrect and what you would like them to do about it
- Notes or reference to the document copies that you have included
You can draft your own letter with this information or you can choose to use a sample letter from the CFPB website. No matter what you decide to do make sure you include information about how to contact you, why the information is wrong and what you want them to do about it. Then, make sure you have all of your supporting evidence. You should always keep a copy of anything you send to these bureaus so you have a record and if possible, send it certified through the mail. This means that you’ll get a return receipt when it’s received.
If there’s a mistake that your lender reported you want to make sure you contact them as well. If they’re reporting mistakes it could very well happen again, after you’ve gotten it cleared up with the credit bureau and you definitely don’t want that.
You also want to make sure that you get proof of any changes that are made to your credit report. The bureaus are required to send you an updated credit report when they make changes at your request.
Each time you send out a letter the credit bureau is required to investigate the information you claim. They have to do this in 30 days and they have to let you know what their findings are, whether in your favor or not.
Step 3: Review The Bureaus Investigation
Your results must be provided in writing and you must get a new copy of your credit report, for free, if there are any changes to your report as a result of the dispute. Not only that but the credit bureau is required to let you know who reported the information, including their name, address and phone number.
When the investigation takes place the credit bureau will update your credit report within approximately 30 days, if they find that information is inaccurate.
If the information is accurate, however, they are not able to remove it. It’s up to you to continue a dispute if you still believe the information is incorrect but you’ll want to add in more information and documentation to back it up.
Whoever reports the incorrect information is required to notify the credit bureau as well. They are required to tell the credit bureau to update or to remove any information that they find to be inaccurate and they must make sure they notify any credit bureau that they reported the information to.
Keep in mind that even if the information is found to be accurate or the furnisher of the information insists that it is correct you can add a statement on your file to explain your dispute.
Step 4: Follow Up
For those occasions where you are not granted any change to your credit report you can request to add a ‘statement of dispute.’ This statement will show up for anyone who decides to pull your credit report. Still, any negative information will eventually be removed from your credit report on its own as it ‘expires.’ That means it’s going to start being less important to your overall score.
If you do get an inaccurate item removed make sure you take another look at your credit report, even after the bureau has sent you one.
You want to make sure that the updates happen quickly and that the incorrect information is actually gone. It might take time for this to happen but if it takes more than a couple months make sure you contact everyone involved again to make sure that it’s done.
Mistakes People Make When Disputing Errors on Their Credit Reports
There are a couple of mistakes you should be aware of when you dispute errors on your credit report:
1. Not Knowing Your Report
You need to make sure you’re very clear on what your report is saying and what it means before you dispute anything. If you don’t know how to read the report you may dispute something that’s accurate or choose not to dispute something that’s inaccurate.
2. Not Supplying the Right Information
You’ll need to support your claim that the information in your report is inaccurate and that means you need proper documentation. If you don’t have the right documentation your claim could be denied without even really looking into it.
3. Filing a Dispute Before a New Application
If you dispute something it means that the item may not be taken into account when your score is being calculated for up to 30 days. After all, that’s how long the credit bureau has to respond and investigate your claim. As a result, when you’re applying for something new you may not get the full score that you would otherwise because of information that’s being held.
4. Sending the Dispute Directly to the Lender
You want to dispute the information that’s being reported on your credit report directly to the reporting bureau. Yes, that information actually came from a lender, but that doesn’t mean they can get the problem resolved faster.
If you don’t approach the right individual person your information may not get where it needs to or information may not be investigated properly. Credit reporting bureaus have a process that they follow to investigate your claims and that’s going to make the process much simpler.
5. Missing Focus in Your Dispute
Explain exactly what you’re disputing and why you believe it to be incorrect. The clearer and more concise you are about what you see the easier it’s going to be for the credit reporting to investigate and that means they’re going to get through the process much faster.
If you ever find an error on your credit report you should take the time to dispute it immediately. Anything that’s incorrect, even a wrong name or address, could result in major problems down the road and could mean that you have even more problematic errors in the future.
While disputing anything can take time and be frustrating, it’s definitely worth the effort that you’re going to put into it.