How To Fix Errors On Your Credit Reports And How They Occur
To err may be human, but if that human error negatively affects your credit worthiness, you’re not alone. The number one complaint received by the Consumer Financial Protection Bureau involved incorrect information listed on consumers’ credit reports. Of those complaints, errors on a credit report were at the top of the list.
Worse yet, 26% of participants in a study by the Federal Trade Commission identified at least one error on their credit report that could make them appear riskier to lenders. The potential negative impacts those errors can have on your credit report can be catastrophic on your ability to get loans, new lines of credits, or better lending terms and interest rates.
That’s why staying on top of the content of your credit reports is so important. In this section, we’ll reveal some of the most common mistakes found in credit reports, how to fix them, and what to do if you disagree with any of the information in your report.
What Happens After You Submit Your Dispute
After you’ve submitted a dispute, Experian goes to work to resolve the issue. The data furnisher will be asked to check their records. Then one of three things will happen:
- Incorrect information will be corrected.
- Information that cannot be verified will be updated or deleted.
- Information verified as accurate will remain intact on your credit report.
Do Your Research & Check All Credit Reports
To get details on your collection account, review all of your credit reports. You can do this by visiting AnnualCreditReport.com. Normally, you can only get one free copy of each report annually. However, due to the Covid-19 pandemic, you can check your reports from all three credit bureaus for free weekly until April 20, 2022.
Your credit report should list whether the collection is paid or unpaid, the balance you owe and the date of the accounts delinquency. If you dont know who the original creditor is and its not listed on your report, ask the collection agency to give you that information.
Afterward, compare the collection details listed on the credit report against your own records for the reported account. If you havent kept any records, log into the account listed to view your payment history with the original creditor.
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Gather Materials & Documents To Dispute Errors
Before you submit your dispute, you should gather the personal information and documents the credit bureau or creditor may need to investigate your claim.
When you open a dispute, you may be asked for the following personal information:
- A copy of your drivers license or government-issued ID
- Your current address and addresses for the past two years
In addition, you may be asked for the following documentation to support your dispute:
- Federal Trade Commission Identity Theft Report or a police report if an account has been added as a result of identity theft
- Billing statements
- Canceled check or money order stub showing a bill has been paid
How Disputing Impacts Credit
Filing a dispute with one or all of the credit bureaus has no direct impact on your credit scores. But once the dispute process is completed, any changes to your credit reports could lead to changes in your credit scores.
Whether your score goes up, down or remains the same depends on what you’re disputing and the outcome of the dispute. Removal of mistakenly reported negative information, such as late payments or unpaid collections accounts, could lead to credit score improvements. On the other hand, corrections to your personal information, while important to maintaining accurate credit tracking, have no impact on credit scores.
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Check Your Credit Report For Errors
You’re entitled to a free credit report if youve recently been turned down because of your credit report if youre unemployed and plan to look for a job soon, if you receive welfare or government assistance, or if youve been a victim of identity theft. Some states have laws entitling you to a free credit report each year in addition to the free credit report you get from other sources.
If you cant get a free credit report, you can order one through the credit bureaus directly for a small fee.
Know Which Credit Report Errors You Can Dispute
Technically, you can dispute anything, but the credit bureau will do an investigation and only delete items that the law requires it to delete. You can dispute credit report items that are inaccurate, incomplete, out of date, or that you believe cannot be verified. Negative items, except bankruptcy, should only appear on your credit report for seven years bankruptcy can remain for 10. If you have negative entries older than seven years, you can dispute them.
Other things you can dispute include:
- Payments reported late that were actually on time
- Accounts that arent yours
- Inaccurate credit limit/loan amount or account balance
- Inaccurate creditor
- Inaccurate account status, for example, an account status reported as past due when the account is actually current
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How Long Does It Take To Remove A Credit Report Error
The Fair Credit Reporting Act limits the time a negative mark can remain on your credit report to seven years. After that time, the item will be removed from your report by the reporting bureau. The Fair Credit Reporting Act also requires that the three credit bureaus investigate and resolve a dispute within 30 days, although some investigations can take up to 45 days. The fastest and easiest way to initiate a dispute is to use the credit bureaus online systems.
If Youve Spotted An Error On One Of Your Credit Reports You Should Take Immediate Steps To Correct The Inaccuracy
Around 25% of U.S. consumers found errors that could affect their credit scores in one of their credit reports, according to a 2012 study by the Federal Trade Commission. The same study reported that one in five consumers had an error that a credit bureau corrected after the consumer disputed the mistake on at least one report.
An error on your credit reports could lead to lower credit scores and impact your ability to open a new credit account or get a loan. Here are steps you can take to ask the credit bureaus to remove incorrect derogatory marks from your credit.
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How To Dispute Your Credit Report
The government and the credit reporting industry recognize how important, and how error-prone, credit reports are, so fair credit laws make it relatively easy to dispute your credit report. Relatively. Here are the main steps, discussed in more detail below:
- Step 1: Get a copy of your credit report and review your credit report for errors.
- Step 2: Write a dispute letter or fill out an online form for each error you uncover.
- Step 3: Collect documents that support your dispute claims.
- Step 4: File your dispute through online forms, telephone, or postal mail .
- Step 5: Allow 30 days or less to get back the results of the dispute investigation.
The three credit reporting agencies offer both in-common and unique dispute services, tools, and advice. Each bureaus site explains its error-dispute processes, including:
- Information to include in your dispute letter
- What supporting documentation to include
- How to file your completed dispute package
- How to find updates as your dispute progresses
The agencies urge online filing for more rapid resolution. Each bureau offers information for postal mail and telephone-based filings as well. You can begin the dispute process by obtaining a copy of your credit report from each bureau at annualcreditreport.com, a site established by law and overseen by the three agencies. If you detect errors, experts recommend marking them on the report, which you will copy and include in your credit report dispute package.
Consider Adding An Explanatory Statement To Your Credit Report
You have the right to add an explanatory statement to your credit report. Once you file a statement about the dispute with a credit reporting agency, the agency must include your statement, or a summary of it, in any report that includes the disputed information. If the agency assists you in writing the explanation, it may limit your statement to 100 words. Otherwise, there isn’t a specific word limit. But it’s a good idea to keep the statement very brief. That way, the credit reporting agency is more likely to use your unedited comment.
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How An Error On Your Credit Report Can Affect You
Is it really necessary to keep close tabs on your credit report? Can one error really have an impact on you? Yes. Your credit report contains all kinds of information about you, such as how you pay your bills, and if youve ever filed for bankruptcy. You could be impacted negatively by an error on your credit report in many ways.
To start, its important to understand that credit reporting companies sell the information in your credit reports to groups that include employers, insurers, utility companies, and many other groups that want to use that information to verify your identity and evaluate your creditworthiness.
For instance, if a utility company reviews your credit history and finds a less-than-favorable credit report, they may offer less favorable terms to you as a customer. While this is called risk-based pricing and companies must notify you if theyre doing this, it can still have an impact on you. Your credit report also may affect whether you can get a loan and the terms of that loan, including your interest rate.
Writing Your Own Statement Of Dispute On Your Credit Report
In the end, you may not persuade the credit bureau or the entity that put the information there to see things your way. You still have a way to get potential creditors to hear your side of the story. While they would certainly give weight to the fact that the negative information is there, they may consider the whole picture before they make a decision whether to give you a loan or credit.
You have the legal right to enter a statement of dispute on your credit report. This would remain on your credit report so others could see it when they are reviewing it. The statement would basically explain why the negative credit entry is wrong. The potential creditor may ask you for more information or documentation to learn more about what happened.
Consumers should be very vigilant about their credit and disputing invalid information. The entire process that we outlined above costs you nothing. It is your legal right and a process that the credit bureaus must provide as part of doing business. Of course, staying on top of payments as they are due and taking steps to repair your credit on your own will only help you in the long run.
Your credit is everything to you and will have a large impact on what you want to do and your life. Be vigilant and know that you are not completely powerless when something wrong appears on your report. You can do something. Feel free to contact us if you have additional questions.
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Contact The Creditor Directly
Contact the creditor that furnished the incorrect information, and demand that it tell the credit reporting agency to remove the data from your report. You can use Nolo’s Request to Creditor to Remove Inaccurate Information or write your own letter. If you get a letter from the creditor agreeing that the information is wrong and should be deleted from your credit file, send a copy of that letter to the agency that made the flawed report.
If you already contacted the creditor directly, it doesn’t have to deal with this dispute again unless you supply more information. But if you escalate your complaint, like to the president or CEO, because you believe the dispute was not properly investigated, and you demonstrate a strong basis for your belief, the company is likely to respond.
If the company can’t or won’t assist you in removing the inaccurate information, contact the credit reporting agency directly. Credit reporting agencies have toll-free numbers to handle consumer disputes about erroneous items in their credit files that aren’t removed through the normal reinvestigation process. Go to the Equifax, Experian, and TransUnion websites to find contact information for these three nationwide credit reporting agencies.
How To Dispute A Debt
Debt collectors rely on an array of information sources in their attempts to collect. To successfully dispute their claim, the consumer must be methodical and thorough.
The first step, says Michael Cummins, finance director for InsuranceGeek, is to gather all of your information and evidence related to the debt. This includes any letters or documentation youve received from the creditor, as well as proof that the debt is not yours. If you have any witnesses who can testify to the fact that you dont owe the debt, you should also gather their testimony.
Luckily, seeing to the details is not rocket science. Heres what you do:
Taking these steps will begin the process of eliminating the erroneous claim against you. But theres more to do.
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What Are The Most Common Credit Report Errors
Some of the most common credit report errors include the following:
- Errors around your identity
- Data management mistakes
- Incorrect balances
Not all errors are created equal. The errors on your credit report could appear in different sections and may have varying impacts on your credit score. For example, you may want to clear up an incorrect former address, alias or former employer, but those types of errors wont impact your credit score at all.
Missing or seemingly incorrect information isnt always an error. Creditors arent required to report your payments to all three credit bureaus and may only report payments to one or two of them. Or they might not report your payments at all. As a result, differences in your reports or lack of information may not be an error.
If you see closed and repaid accounts on your reports, those arent necessarily errors either. Accounts that never had a late payment can stay on your credit report for up to 10 years. If there was a late payment or if the account was sent to collections, the credit bureaus arent required to remove the account until seven years after the first late payment on the account. This can be the case even if the account was closed, if you paid off the balance with the original creditor or if you paid off the debt with a collection agency.
Here are some credit report errors you can dispute, and others you cannot:
Common Mistakes That Cause Credit Report Errors
To begin, it’s important to know if the person responsible for the error is you. Often, a person may have applied for credit under different names . Make sure you’re consistent and always use the same first name and middle initial, otherwise your report may actually contain information about another person with a similar name. Likewise, apply the same consistency and care with things like your Social Security number and address.
Or it could be a case of what you didn’t put in your report. If you were denied credit because of an “insufficient credit file” or “no credit file,” it may be because your credit file doesn’t reflect all your credit accounts. Though most national department store and all-purpose bank credit card accounts will be included in your file, not all creditors voluntarily supply information to the credit bureaus, nor are they required to report consumer credit information to credit bureaus.
If you find missing accounts, ask your creditors to begin reporting your credit information to credit bureaus, or consider moving your account to a different creditor who does report regularly to credit bureaus.
Other common errors to look for:
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Fixing Credit Report Errors
To ensure mistakes are corrected as quickly as possible, contact both the credit bureau and organization that provided the information to the bureau. Both these parties are responsible for correcting inaccurate or incomplete information in your report under the Fair Credit Reporting Act.
Keep in mind that all three of the credit bureaus now accept the filing of disputes online, with Experian now only accepting online submissions.
Find out how to initiate a dispute online.
Begin by telling the credit bureau what information you believe is inaccurate. Credit bureaus must investigate the item in question-usually within 30 days-unless they consider your dispute frivolous. Include copies of documents that support your position. In addition to providing your complete name and address, your communication should:
- Clearly identify each disputed item in your report.
- State the facts and explain why you dispute the information.
- Request deletion or correction.
You may also want to enclose a copy of your report with the items in question circled. Your communication may look something like this sample.
If mailing a letter, send it by certified mail, return receipt requested, so you can document that the credit bureau did, in fact, receive your correspondence. Also, keep copies of your dispute letter and enclosures. If you want help disputing mistakes on your credit report, myFICO can help you write a free letter in minutes.
Start By Reviewing Your Credit Report
To get started, you’ll need to review your credit reports to catch any errors. There are three main credit bureaus, each with its own report: Experian, Equifax and Transunion. You’ll need to obtain a credit report from all three, since they all collect information in their own way.
Though the credit bureaus can charge you for a credit report, federal law allows you to obtain your credit reports for free once a year on annualcreditreport.com. Even better, temporary changes to the federal law allow you to obtain up to six free credit reports per year through 2026 by visiting the Equifax website. And all three credit bureaus continue to provide free weekly reports until April 20, 2022.
To access your reports, make sure you have your Social Security number ready and follow the steps described on the website. You’ll be able to view or download them directly from the site so you can read them over carefully for errors.
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