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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.
File A Dispute With The Credit Agency
If you take the time to look at your free yearly Canadian credit report, theres a fair chance youll find some reporting errors. Perhaps a past credit card is listed as delinquent despite the fact that you paid off the entire account, and then closed it.
If you do notice inaccuracies in your credit report, you can challenge it via Transunion or Equifax creditors will have 30 days to respond. Be prepared to furnish proof of your claims if youre right, the incorrect items could be removed from your report entirely.
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How Delinquent Debts Are Reported On Your Credit Reports
After your debt has been transferred or sold to a debt collector, it will probably appear twice in your credit history. According to the credit reporting agency Experian, this is how it works: The debt starts as a current, never late account. As you get behind on the payments, it is typically reported as being 30 days late, 60 days late, 90 days late, and so forth.
Ways To Remove Negative Items From Your Credit Report
Some criminals even take your identity to make purchases using your credit card. There is also a crime called phishing. Thieves send e-mails, pretending to be a legitimate organization, and ask you for personal information such as account numbers or financial data and passwords. They try to make it look like they are from an organization that you would normally give out this type of information, such as your bank or card company.
You can protect yourself by shredding all documents before throwing them away, including check stubs with bank account numbers on them old statements with credit card numbers on them utility bills containing Social Security Numbers receipts from stores or restaurants any document that has identifying information about the owner printed on it. The FTC recommends that you shred large documents and papers containing personal information or other financial data before throwing them away. This is to protect against identity theft, which is by far the fastest growing crime in America.
If you are concerned that your credit file has been accessed illegally, contact the Consumer Credit Counseling Service at 717-238-7000 or 800-251-2227 for free assistance in handling this problem. Reprinted from SCRAPs Credit Report Fixer newsletter
How can I get negative items removed from my credit report?
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File A Dispute With The Credit Reporting Agency
Once you have your report, make sure to look through each account and see if there are creditors you dont recognize. Its also important to check whether older derogatory items are still being reported.
If you do find errors in your reports, its time to initiate a dispute directly with the reporting bureau through its website or by mail. This will prompt an investigation on the bureau’s part.
Bear in mind that you have to dispute the entry with each agency to make sure the removal is complete across the board.
How to file a dispute online
Each bureau Equifax, Experian and TransUnion has a section dedicated to walking consumers through the online dispute process. Once you create an account, you can file as many disputes as you need and check their status, for free.
How to file a dispute letter
You can also send a dispute letter to the bureaus, detailing any inaccuracies you’ve found in your credit file. When writing your letter, provide documentation that supports your claim and be precise about the information you are challenging. The Consumer Financial Protection Bureau recommends enclosing a copy of your report with the error circled or highlighted.
Depending on the information being disputed, these are some of the documents you can provide to help aid the investigation:
- Copies of checks
Include this dispute form with your letter.
Common Credit Report Errors To Look Out For
According to the Consumer Financial Protection Bureau, these are the most common errors consumers find on their credit history:
Mistaken identity
- Wrong name, address or phone number
- Accounts from someone with a similar name
- New credit accounts opened by someone who stole your identity
Incorrect account status
- Accounts wrongfully labeled as open, past due or delinquent
- Accounts that wrongfully listed you as the owner instead of authorized user
- Wrong date for the last payment received, date the account was opened or delinquency status
- Same debt listed multiple times
Data management
- Information that is not removed, despite already being disputed and corrected
- Accounts that are listed multiple times, with different creditors
Balance
- Incorrect credit limit
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Work With A Credit Counseling Organization
If you don’t feel comfortable handling the credit dispute yourself, the best place for assistance is usually a nonprofit agency. They provide credit counseling services for free. There is sometimes a fee for add-on services, which may apply to credit dispute resolution assistance. Credit counselors differ from credit repair companies in that they don’t do the disputes for you. They help you understand how to handle disputes. That’s why even if they charge a fee, it will usually be significantly lower than a for-profit credit repair companyâs fee.
Again, make sure you’re dealing with a reputable credit counselor. One sign that you have a good counselor is if they’re a member of the National Foundation for Credit Counseling . The NFCC has strict requirements for its members to make sure you receive the service you need.
How To Monitor Your Credit To Detect Inaccuracies
Along with inaccurate information about you, that debt collectors may report to Experian, Equifax, and TransUnion, you should also lookout for signs of identity theft on your credit reports.
Identity theft happens more and more now as data breaches and scams keep exposing our sensitive financial data.
Heres how to monitor your credit to make sure its in good standing with all three reporting bureaus:
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Paying To Remove Negative Credit Info Is Possible But May Not Succeed
A bad credit score can work against you in more ways than one. When you have poor credit, getting approved for new loans or lines of credit may be difficult. If you qualify, then you may end up paying a higher interest rate to borrow. A low credit score can also result in having to pay higher security deposits for utility or cellphone services.
In those scenarios, you may consider a tactic known as pay for delete, in which you pay to have negative information removed from your credit report. While it may sound tempting, its not necessarily a quick fix for better credit.
Get Your Negative Items Professionally Removed
In some cases, we recommend speaking with a Credit Repair professional to analyze your credit report. It’s so much less stress, hassle, and time to let professionals identify the reasons for your score drop.If you’re looking for a reputable company to increase your credit score, we recommend Credit Glory. Call them on or setup a consultation with them. They also happen to have incredible customer service.Credit Glory is a credit repair company that helps everyday Americans remove inaccurate, incomplete, unverifiable, unauthorized, or fraudulent negative items from their credit report. Their primary goal is empowering consumers with the opportunity and knowledge to reach their financial dreams in 2020 and beyond.
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Review The Claim Results
Reporting agencies and lenders usually take around 30 days to investigate disputes. Once they make a decision, they must notify you within five days of completing their review. The notice will inform you if the disputed item was found to be inaccurate or not.
If the disputed information was, in fact, inaccurate, the bureau must update or delete the item. They should include a free copy of your file if the dispute results in a change.
If the bureau or lender considers the disputed information isn’t a mistake, you can file an additional claim. Review your initial claim for any errors and correct those. If possible, you should include additional documents to support your request as this can help the bureau evaluate any data it might have missed the first time around.
How To Check With The Data Furnisher
When you file a dispute, the Federal Trade Commission suggests also informing the company that provided the data to the credit bureaus, such as a bank, lender or card issuer, in writing. These sources of information are known as furnishers. Notifying the data furnisher may cause them to proactively stop reporting the inaccurate information to the credit bureau, although that’s not guaranteed.
Send the letter to the company using the address it listed on your credit report. If there is no address listed, ask the company for one.
The FTC notes on its website: “If the provider continues to report the item you disputed to a credit reporting company, it must let the credit reporting company know about your dispute. And if you are correct that is, if the information you dispute is found to be inaccurate or incomplete the information provider must tell the credit reporting company to update or delete the item.”
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Filing A Dispute Online
I used to recommend that you write to initiate a dispute so that you could maintain a paper trail. Today, when you dispute online, the bureaus provide confirmation throughout the process. Just save or print the documents along the way to establish a paper trail for future reference. Either way, be sure to document your interactions.
Disputing online is faster, easier and more secure than doing it via the mail, but you may need to be able to upload documents to support your dispute. Think about sending a letter with all your identification, credit information and other documents. How many people handle that letter and may be tempted to open it?
When you dispute online at Experian, for example, you choose the items you want to dispute with a click. Youre walked through the process one step at a time. When youve finished, you submit the disputes and any documents you upload to support them. You can create a paper trail by printing the report, the dispute shopping cart, your documents and confirmation for free.
Remember To Stay Patient
This could turn into a long process, but it will be well worth it for the majority of Americans. Having great credit is not always easy, especially if you started out with a rough past and made mistakes along the way. But it can be even tougher if you have erroneous or inaccurate information listed under your credit file.
Getting rid of this information will allow you to boost your score and erase a lot of bad history on your accounts. Youll suddenly see yourself getting approved for just about anything you want once you finally get the CRAs to remove these marks.
Stay positive and stay patient. You will soon see a credit score increase which will give you more access to credit and better credit lines.
Ready to mail? Here are addresses:
Experian
If you have disputed items that did not get removed and know they are inaccurate, you can use the 609 Dispute Letter Template.
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Getting A Satisfied In Full Reporting
If the collection agency agrees to settle for less than you owe, be sure it also agrees to report the debt it holds as “satisfied in full” to the credit bureaus. Get written confirmation from the creditor and the collector. The debt collector’s confirmation should say that it will acknowledge the debt as paid in full when you pay the agreed amount.
Potential Tax Consequences of Settling Debt
The IRS generally considers canceled debt of $600 or more as taxable, and settling debts for less than what’s owed can increase your tax liability depending on your tax bracket and the canceled amount. Consult a tax professional for more information.
If the creditor, or the debt collector if it has the authority, agrees to delete the original account line, get confirmation that it will submit a Universal Data Form to the three major credit reporting agencies deleting the account/tradeline. If the debt collector doesn’t have the authority to act for the original creditor to delete the account information on the original debt, you might need to contact the creditor and the debt collector separately.
Strategies That Wont Help Remove Negative Information
So now you know four strategies for getting negative entries off your credit file.
Sometimes, though, it helps to know what wont help remove negative information.
If youre searching for credit repair answers, know that these things wont help fix your credit:
- Paying Off Old Stuff: A lot of people think debt collectors will remove negative information from their credit if they can just pay off the charge-offs, past-due balances, and collection accounts. In reality, paying off these accounts will not help your credit. Lenders will still see you had trouble paying off previous accounts.
- Bankruptcy: Filing bankruptcy could help restore your financial health by reorganizing or dissolving old debts. But it wont help your credit score. In fact, the bankruptcy will pull down your score for up to 10 years. Plus, the road to bankruptcy is paved with late payments, missed payments, and collection accounts all of which will remain on your credit report along with the bankruptcy.
- Closing Delinquent Accounts: A closed account wont look any better to prospective lenders than an open account. In fact, closing accounts could hurt your score since FICO places value on older average ages for credit accounts.
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Add More Positive Data To Your Credit Report
Whether your file is thin or fat, adding positive trade lines will always help your score. Negative information counts for less and less each month as it ages until it disappears altogether in seven years. But around year two, most negative items have lost their big impact.
To rebuild your credit faster than just waiting for time to heal your wounds, try adding new accounts. Easy adds include gas and retail cards, secured credit cards, passbook loans and installment loans on small furniture purchases.
Adding positive information to your file will speed your score recovery by balancing or offsetting negative data quickly. Using programs like Experian Boost and UltraFICO can also be helpful in getting approved when you decide to apply for new credit.
Of course, be sure to make those new payments on time, every time, and youll be in the good credit column before you know it.
Remember to keep track of your score!
What If The Account Is Already In Collections
In another scenario, lets say youve successfully disputed an item with the creditor, but theyve already sent your info to collections. A debt collection company keeps calling you, asking you to pay money you dont owe. If this happens, you can actually file a complaint with the Consumer Financial Protection Bureau.
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Pay For A Credit Monitoring Service
TransUnion, one of the major credit bureaus, offers a that requires a fee. I have used this service myself.
You can find a lot of other fee-based credit monitoring systems out there.
So why would you pay for credit monitoring when you can get it free?
Paid services have more elaborate tools, but they also have ways to help you recover from identity theft rather than simply detect it.