How to Dispute Errors on Your Credit Report

How to Dispute Errors on Your Credit Report

Given that your credit history can affect your chances of being given a loan or extended credit, employment prospects, ability to get favorable interest rates and insurance rates, there’s simply too much at stake to not diligently check your credit reports for errors at least once a year (you can get a free copy of your credit reports once a year at AnnualCreditReport.com). Don’t naively assume that all the information in your credit reports is accurate—errors are more common than you probably think.

In fact, in a recent Federal Trade Commission study about credit report errors, 25 percent of study participants found a potential material mistake in their credit reports—a mistake that if corrected would change the person’s credit report (e.g. a credit card account listed on the credit report that wasn’t theirs or a late payment that they believed was paid on time). After disputing these errors with the credit report bureaus, 20 percent of study participants saw at least one change made to information on their credit report; 13 percent saw a change in their credit score as a result of the change made to their credit report; and 5 percent had errors significant enough to affect whether they were eligible for credit or a more favorable interest rate.

Here are some of the most commonly found credit report errors:

Identity errors: Make sure that all the information in your credit report belongs to you. People with common names or a name that includes a Junior or Senior suffix are especially vulnerable to these types of mistakes. Identity errors on your credit report can also be the result of identity theft.Inaccurate dates: Delinquent and derogatory marks will stay on your credit report until a set period of time of time has passed (e.g. foreclosures stay on your report for seven years). Make sure that the date of these negative events is accurately reported on your credit report since the date will be used as the starting point for counting down the years until the event is removed from your credit report. For example, if the foreclosure filing date for your house was on January 1, 2012 but your credit report erroneously lists this date at January 1, 2013, failure to catch and fix this critical error would mean that you would have to wait until January 1, 2020 instead of January 1, 2019 for the foreclosure event to be removed from your credit report.Old information: Don’t assume that delinquent events will be removed form your report just because the required number of years has passed since the event was reported on your credit report. It’s your responsibility to check that these negative events were removed from your account at the right time.Duplicate debt information: Delinquent or collection accounts are often sold over and over again to different debt buyers or collection agencies. When this happens, it’s common to see the same debt reported more than once on the credit report when it should only have been reported one time by the current legal holder of the debt. Each duplicate debt reporting on your credit report can cause your credit score to drop by 20 or more points—as such, carefully review your credit report for any duplicate debts and promptly dispute any errors you find.Other incorrect information: Account balances, payment dates, and credit limits can often be incorrectly listed on your credit report.

If you find a potential error on your credit report, you need to dispute it with the credit bureaus. Here are three steps for you to follow:

Step 1: All three of the major credit reporting agencies have an online dispute system on their websites. Click here to dispute your Experian credit report online; click here to dispute your Equifax credit report; and click here to dispute your TransUnion credit score online.

Step 2: The Federal Trade Commission also recommends that in addition to filing your dispute online you also write a write a dispute letter to the Complaints Department of the credit reporting company so that there is a paper trail of your dispute. Your dispute letter should:

Include your complete name, address, phone number and Social Security numberIdentify each item, account number and creditor that you are disputingState the facts and reasons why you dispute the informationEnclose copies (not originals) of documents that support your position, including a copy of your credit report with the disputed items circledAsk for the erroneous information in your credit report to be removedInclude your signature and the date

Make copies of your dispute letter and any enclosures for your records. Also, be sure to send your letter by certified mail, “return receipt requested,” so you have documentation of when the credit reporting company received your letter.

The credit reporting company must complete an investigation of your dispute within 30 days of receiving your dispute letter. After the investigation is over, the company must send you a new credit report that shows the resolution of your dispute. If the investigation found that your credit report contained incorrect information, the company must notify all the other credit bureaus so they can correct the error in your credit report. You can also request that the credit reporting company sends notice of the error to anyone who requested your credit report in the last six months (e.g. an employer, a bank you tried to get mortgage or loan from, a credit card company, etc.).

Step 3: Write a letter to the appropriate creditor or other information provider, stating that your are disputing certain information provided to the credit bureau and requesting that the information provider copy your on all the correspondence they will be sending to the bureau. Your letter should also include copies of documents that support your position. For help drafting your letter, refer to the sample dispute letter on the Federal Trade Commission’s website.