Hire A Credit Repair Service
Disputing errors can be a time-consuming process, especially if your history has several mistakes or if you were a victim of identity theft. Reputable credit repair companies such as , Lexington Law or Sky Blue may be viable solutions if your file is riddled with inaccuracies.
Credit repair services can help you dispute inaccurate negative information and handle creditor negotiations. However, if you decide to hire a credit repair agency, bear in mind that there are consumer protection laws regulating how they operate and what they can do. The establishes the following regarding credit repair services:
- They cannot provide false or misleading information concerning a persons credit status and identification
- They must provide a detailed description of the services they provide
- They cannot charge for their services until they has been completed
- There must be a written contract detailing the services theyll provide, the time frame in which these services will be provided and the total cost for them
- They cannot promise to remove truthful information from your record before the term set by law
- You have three days in which to review the contract and cancel without penalty
Before signing up with one of these companies, its important to understand what they can and cannot do. For example, any company that promises to remove accurate negative items or create a new credit identity for you is most likely engaging in illegal practices or a scam.
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.
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.
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What Happens When You Dispute Something On Your Credit Report And Get Denied
The initial investigation conducted by the credit bureaus isnt extremely thorough. It amounts to them contacting the creditor or reporting entity and asking if the information is true. The documentation that the creditor must provide to verify the debt is not typically substantial. So, its possible that your initial dispute is denied and the inaccurate information remains on your report.
When that happens, you can escalate the dispute by sending additional information to make your case. According to TransUnion, examples of supporting documentation for a dispute include letters from the creditor, canceled checks showing payment or accurate bills or statements that document your case.
One option many people consider is working with a professional . These firms do all the same things you can do on your own to dispute information. However, they tend to do them faster and with greater aggression and expertise, which can provide you with peace of mind and help make a positive outcome more likely.
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Check Your Credit Report
You should check your credit report after 30 days. Credit bureaus have to conduct their investigation within the time frame of a month. When the 30 days have passed, you should re-check your credit report to see whether they have removed the negative item. This period of 30 days starts from the time the credit bureau received your letter.
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Know Your Rights Under Fdcpa
Problems between consumers and debt collection agencies have been around a long time. In 1978, Congress passed the Fair Debt Collection Practices Act in an attempt to give consumers protection from abusive practices. The Federal Trade Commission , which oversees enforcement of the law along with CFPB, says debt collection tops the list of consumer complaints.
The FDCPA outlines debt collection guidelines:
- Collection agencies must restrict phone calls to between 8 a.m. and 9 p.m. local time.
- Debt collectors may not call you at work if you tell them that you are not allowed to receive calls.
- You can stop calls from collection agencies by sending a certified letter asking them to stop calling.
- Debt collectors must send you a written validation notice that states how much money you owe, the name of the creditor and how to proceed if you want to dispute the debt.
- Debt collectors may not make threats of violence, use obscene language, make false claims to be attorneys or government representatives, misrepresent the amount of money owed, or claim that you are going to be arrested.
- Debt collection agencies are only allowed to talk about your debt with you and your attorney. They can reach out to your friends and family in search of your contact information, but they cant speak about your debt .
Should I Pay Debt Collectors Or Original Creditor
Sometimes it can be confusing to know if you should pay the debt collection agency or the original creditor because a debt changes hands so many times.
There are really three scenarios when a debt is unpaid and the consumer could be confused about who they are dealing with and who is getting paid.
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Is It Wrong To Dispute Correct Information
Im not the morality police, and you can do what you want to do, but you do have the right to challenge any information on your report whether its correct or not.
Its your right to have correct and verifiable information on your credit reports. I cant speak for them, but I imagine theyd also want your credit report to be fully accurate and verifiable.
Wait Up To 45 Days For The Credit Bureau Or Furnisher To Investigate And Respond
The credit bureau generally has 30 days after receiving your dispute to investigate and verify information with the furnisher. The credit bureau must also report the results back to you within five days of completing its investigation.
If you dispute the error with the information furnisher, that company must also report the results of its investigation to you. It also typically has 30 days to investigate. But if the furnisher stands by the accuracy of the information it reported, it wont update or remove the error.
One more thing to note is that either the credit bureau or the furnisher may decide that your dispute is frivolous. This generally happens when youve submitted incorrect or incomplete information on the dispute, but can also occur if youve tried to contest the same item multiple times without any new information or if youve attempted to claim that everything on your credit report is incorrect without proof.
If the bureau decides that your dispute is frivolous, it doesnt need to investigate it further as long as it communicates that to you within five days, along with the reasoning for deeming the dispute frivolous. If your original dispute was labeled frivolous, you can try to resubmit a dispute with updated materials.
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File A Complaint About The Creditor
If the creditor that furnished the incorrect or incomplete information fails to revise it or advise the credit reporting agency of a correction , you can file a complaint with the Federal Trade Commission . Or, if the creditor is a large financial institution, you may file a complaint with the federal agency that oversees that type of financial institution. The CFPB also oversees many types of financial agencies, so you can file a complaint there too.
If you aren’t sure which agency to contact, start with the FTC or CFPB, which will likely forward your complaint to the appropriate agency. Generally, these government agencies won’t represent you individually. But they could send an inquiry to the company, and if there are enough complaints or other evidence of wrongdoing, they might take legal action.
Ways To Remove Collections From Credit Report
Still, there is a chance you could get the collection removed. A collection stays on your credit report for seven years from the time of your last payment, and there are three ways to get it taken off.
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What Happens After You Dispute Information On Your Credit Report
Tip
If you suspect that the error on your report is a result of identity theft, visit IdentityTheft.gov, the federal governments one-stop resource to help you report and recover from identity theft.
If the furnisher corrects your information after your dispute, it must notify all of the credit reporting companies it sent the inaccurate information to, so they can update their reports with the correct information.
If the furnisher determines that the information is accurate and does not update or remove the information, you can request the credit reporting company to include a statement explaining the dispute in your credit file. This statement will be included in future reports and provided to whoever requests your credit report.
What Is A Dispute Removal Letter
What is a credit dispute letter? A credit dispute letter is a document you can send to the credit bureaus to point out inaccuracies on your credit reports and to request the removal of the errors. In the letter, you can explain why you believe the items are inaccurate and provide any supporting documents.
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Can A Debt Collector Contact You If You Dispute Debt
When you dispute a debt in writing, debt collectors cant call or contact you until they provide verification of the debt in writing to you.
This essentially puts everything on hold until you receive verification, but you only have 30 days from when you first receive required information from a debt collector to dispute that debt. You can lose valuable rights if you dont dispute it, in writing, within that 30 days.
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.
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Do The Credit Bureaus Actually Investigate Disputes
Yes, the three major credit bureaus are obligated by law to investigate credit report disputes. The question is how well they do it. According to the FCRA, they are required to investigate your disputes unless they consider them to be frivolous.
If your dispute is valid, the credit bureau will correct your credit report, but it could take some persistence on your part. After receiving your dispute letter or online dispute, its their responsibility to look into the matter.
What To Do When You Cant Pay Back A Debt
You should do everything within your power to avoid letting a debt go unpaid. Otherwise youll risk significant damage to your credit scores and a major blemish on your credit reports for years to come.
However, if youre facing a financial challenge, such as extreme medical debt or an abrupt loss of income, and find that you cant pay the debt, that doesnt automatically mean the collection agency has a right to take everything you own. In the worst-case scenario, the agency will try to garnish your wages or seize your property. These extreme actions are only possible, however, if the contract you signed with the original creditor and state law allow for them.
The federal Fair Debt Collection Practices Act regulates the means and tactics that debt collectors may use to entice consumers to pay. Its important to know what kind of conduct is allowed, so you can report and avoid debt collectors who violate the law.
For example, collection agencies cannot misrepresent themselves, the amount you owe or the actions they plan to take to get you to pay. There are limitations to the collectors ability to seek remediation through the courts, as well as how they may add collection fees.
The best thing to do if you are ultimately unable to pay your debt is to seek legal help. If you have multiple accounts in collections and the totals are well beyond your ability to create a realistic payment arrangement, you should consult with a bankruptcy attorney to discuss your options.
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How To Dispute A Credit Card Charge
Although the method of contacting your creditor may differ depending on your circumstance, the actual credit card dispute process comes down to contacting your creditor to report the issue, providing any necessary evidence, and following up about getting the inaccurate charge taken off your statement. You’ll also need to hold off on paying the charge in dispute. Here’s a step-by-step look at how to dispute a credit card charge.
Incorrect Information On Your Credit Report Challenge It
If any changes have occurred on your credit report for example, if information on your report needs to be updated or amended TransUnion will send you an updated credit report.
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