How To Dispute Credit Report Errors
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Errors on your credit reports can cause your credit scores to be lower than they should be, which can affect your chances of getting a loan or credit card and how much interest you pay. Disputing credit report errors and getting those negative items removed can be a quick route to a better score.
Here’s how to dispute credit report errors and have them removed in four steps.
Does A Dispute Hurt Your Credit
You might be surprised to learn that a successful credit dispute can actually make your credit score go down instead of up, even if the result was getting a negative item removed from your credit report.
It has to do with one part of the complicated credit scoring system known as buckets or scorecards. John Ulzheimer, a well-known credit expert who has worked with FICO, Equifax, and Credit.com, has written an article in our Knowledge Center about to explain the concept.
In the article, Ulzheimer explains that credit score points are assigned based on certain buckets that consumers fall into, which can be described as answers to questions that the credit scoring model asks about your credit report.
For example, if the question is How many major derogatory items are on your credit report? there might be a bucket for consumers with no major derogatories, another bucket for consumers with one major derogatory item, and so on.
Each bucket has its own unique credit scoring algorithm, meaning your credit score is actually calculated differently based on which bucket you fall into.
Removing a negative item from your credit report, such as a collection account, could potentially move you from one bucket to another. In this new bucket, your score is calculated differently than it was before because now you are being compared to an entirely different group of consumers.
What If The Information Is Rightbut Not Good
If theres information in your credit history thats correct, but negative for example, if youve made late payments the credit bureaus can put it in your credit report. But it doesnt stay there forever. As long as the information is correct, a credit bureau can report most negative information for seven years, and bankruptcy information for 10 years.
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What Makes Up Your Credit Score
Your is calculated using different scoring models, such as the VantageScore and FICO. These are the two most widely used credit-scoring models, and each has its own proprietary metrics and criteria. However, both models have one thing in common: they use data from the major credit reporting agencies to generate your score.
If you want to repair bad credit, its important to understand what factors VantageScore and FICO evaluate when generating scores.
VantageScore 4.0 Scoring Model
VantageScore prioritizes total credit usage, balance and available credit. Basically, the model first evaluates the amount of credit you have available to use and how much of it youre using. Using 30% or more of your available credit can lower your score since lenders usually consider it a red flag.
Other factors considered include your credit mix, payment history, credit history length and new accounts.
FICO Scoring Model
The FICO score is the industry standard its the oldest credit scoring model and what most lenders use to evaluate a persons creditworthiness. FICOs scoring has five categories, each with a percentage value indicating how much weight they place on each:
How To Dispute And Fix Credit Report Errors
Both the credit bureau and the business that supplied the information to the credit bureau must correct information thats wrong or incomplete and they have to do it for free.1 If you find a mistake, missing information or information that you dont recognize, follow the steps below to correct the error.
Be sure to keep copies of all correspondence regarding inaccuracies in your credit reports. Credit bureaus are required to review errors you tell them about and usually respond within 45 days of receiving your notification.
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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.
What Can I Do If I Believe That I Have A Mixed File
If you believe your information has been mixed with someone else’s, you should:
- Submit a dispute with all of the credit reporting companies that have incorrect information on your credit report
- Identify the information that doesn’t belong to you. This may include addresses, other identification information, and accounts
- Make sure your identification information is complete and includes:
- Your full name, including middle name and suffix, such as Jr., Sr., II, III
- Date of birth
- Social Security Number
- Complete address, including apartment number if applicable
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Do You Have Damaging Errors On Your Credit Report And Need Help
Many consumers know first hand that credit report errors are common and can be harmful to your credit and daily life. According to a study released in 2013 by the FTC, 5% of consumers have credit report errors. Mistakes on your credit report can prevent you from getting a loan or credit, can prevent you from getting housing, and even prevent you from getting a job.
As a consumer you should check your credit report annually to ensure all information being reported is correct. Yearly credit report monitoring also helps you catch signs of identity theft. Ordering your credit report annually is easy and Free at AnnualCreditReport.com Here you can get a free copy of your credit report once a year from the three national credit bureaus: TransUnion, Equifax, and Experian.
Get Bill Payments Under Control
The biggest impact on your credit score is your payment history, which accounts for 35% of your score. If you want to improve your credit score, paying your bills on time will help. One way to stay on top of your payment due dates is to set up automatic payments for your existing accounts. This way, you don’t have to remember to make a payment every month, and it will always be on time.
While we always recommend paying off your full balance, if you can’t afford it, paying the minimum amount due can help you avoid late fees and even higher interest fees. Paying the minimum will slowly chip away at your balance, which will improve your score over time.
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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.
How To Order Your Free Credit Report
There are two major credit reporting agencies in Canada: Equifax and TransUnion. You are entitled to one free credit report every 12 months from each of the credit rating agencies. Youll have to make a written request to receive your credit report by mail. You can receive your credit report and credit score instantly online, but it cost you money.
To avoid paying, you can request your credit report every six months, alternating between the two agencies. If you suspect youre a victim of credit card fraud or identity theft, its advisable that you request a copy of your credit report immediately.
To confirm your identity, youll need to provide your SIN and two photocopies of government-issued identification .
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Common Credit Report Errors And How To Spot Them
Watch for common personal information mistakes, like a misspelled name or a wrong address. Most credit report errors are related to personal information or financial history. As you review your credit report, make sure that your personal information is complete and correct, and that your credit history is accurate, says Gandolfo.
Also watch for common financial errors, like payments inaccurately marked as late, accounts you dont recognize, accounts in your name that you didnt open or debts incorrectly reported to collections. Keep in mind that some retail credit card accounts may appear under a different business name than the one where you opened it, such as the financial institution that issued the card.
Check Your Credit Report And Score
If you want to increase a low credit score, the first step is to look at your credit report and review it for accuracy. Throughout the pandemic, you can access free weekly online credit reports from the three bureaus by going to AnnualCreditReport.com. You can also get up to six free credit reports through 2026 from Equifax.
It’s important to get your credit report from all three credit reporting agencies. Checking your own credit score is a soft hit on your credit and will not impact your score.
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How Long Does It Take To Fix Errors On A Credit Report
Once you submit your dispute, the Fair Credit Reporting Act allows the credit bureau 30 days to complete the dispute process. The agency will forward your dispute to the creditor and, ideally, the creditor will verify that the agency should remove the error from your report.
Once the creditor responds , the credit bureau will notify you of the results of the dispute. In the meantime, if you filed your dispute online, you can log in to the credit bureaus website to check on the status of your claim.
If a change is made to your credit report, the credit rating agency will also notify the other two major credit bureaus so any inaccurate information can be updated on those reports as well. If all goes well, you should see an improvement to your score right away.
Thats the ideal scenario. However, things dont always work out so well. If there is a lot of back and forth between you, the credit bureau and your creditor, the process can take 90 days or more.
In a follow-up study to their 2012 report, the FTC revisited 121 consumers who had filed disputes with credit reporting agencies that were unresolved at the end of their initial study. One year later, the study found that:
Call Up The Credit Bureaus
If the lenders are of no help, its time to call the credit bureaus and let them know directly.
Come prepared and understand the following:
Ask them, point-blank, about every single item of concern on your credit report. If they think it was done in error, they will be able to open a dispute.
A dispute happens when an item on your credit report is thought to be in question. Employees of the credit bureau will look into it and determine whether or not they deem it legitimate.
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Disputes Related To Your Personal Information Or An Inquiry
- Added: This item was added to your credit report.
- Address Updated: This may appear to you as Deleted, as your address is updated to the current address.
- Deleted: The item was removed from your credit report.
- Processed: The item was either updated or deleted.
- Remains: The company reporting the information has certified to Experian that the information is accurate, so the item has not changed.
What If You Disagree With The Credit Bureau’s Investigation
If you tell the information provider that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to a credit bureau while that dispute is being investigated.
Finally, if the investigation does not produce the results you feel are correct, and inaccurate information in your credit report is causing you harm, you may consider hiring a lawyer to help resolve your dispute as a last resort.
The secret to success is to be vigilant and tenacious when it comes to reviewing, repairing, and correcting the record regarding your credit reports.
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Ways To Dispute Information On Your Credit Report
TransUnion and Equifax have their own processes for disputing credit reports, but Experian provides three methods for submitting disputes:
- Online: Get access to your Experian credit report and initiate a dispute at the Experian Dispute Center . There is no cost to you for using this service.
- : To initiate a dispute by phone, you’ll call the number displayed on your Experian credit report. If you’d like to have a copy of your credit report delivered to you by mail, call 866-200-6020.
- : You can dispute without a credit report by writing to Experian, P.O. Box 4500, Allen, TX 75013. .
Why You Should Fix Errors In Your Report
The information on your credit report can effect your purchasing power as well as your ability to find work, rent or buy a home, and purchase insurance. Businesses use the information in your credit report to decide whether to lend you money, extend you credit, provide you with insurance, or rent you a home. Credit reports are used by some employers when making hiring decisions. The amount you will have to pay to borrow money is also influenced by the strength of your credit history. You’ll want to double-check that the data in your report is correct and full.
Incorrect information may appear on your credit report, affecting your ability to obtain credit, insurance, or even a job. Checking your credit report might also help you detect identity theft. This occurs when someone uses your personal information without your authorization, such as your name and address, credit card or bank account details, Social Security number, or medical insurance account numbers.
Once every 12 months, you have the right to receive free copies of your credit report from each of the three main credit bureaus. Everyone in the United States can acquire a free credit report each week from Equifax, Experian, and TransUnion through the pandemic at AnnualCreditReport.com.
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Impact Of Identity Theft On Your Credit Report
Identity theft when someone steals your personal information and uses it to open new financial accounts can wreak havoc on your credit. These new accounts show up on your credit record and hurt your score, especially if theyre delinquent or if the identity thief applied for several in a short amount of time.
Cleaning up your credit after identity theft can take anywhere from several months to years. The longer it takes you to realize someone stole your identity, the more difficult it will be to undo the damage. This is why keeping a close eye on your report and learning how to protect yourself from identity theft will help you to keep your information safe.
How to remove negative items related to identity theft
If you believe youve been a victim of identity fraud, file a dispute with the Federal Trade Commission online at IdentityTheft.gov or by phone at 1-877-438-4338. You should also file a police report.
To prevent further damage to your credit history, these are the steps you should take:
Notify the incident to Transunion, Experian and Equifax through phone or mail
Place a security freeze and fraud alert on your credit report
Request a copy of your credit report through AnnualCreditReport.com
Look out for unauthorized transactions or new accounts that dont belong to you
Contact creditors to close compromised accounts
Consider subscribing to an identity theft protection or credit monitoring service