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How (and Why) to Fight an Error on Your Credit Report

Credit report speaks a lot about credit history and how lenders review your loan payments. For example, a poor credit score means you have low credit limits with fewer chances of getting a loan or opening a new credit account. On the other hand, an excellent credit record increases your credit limit. As a result, it lets you enjoy low interest rates when taking a loan.

While building your creditworthiness, you may encounter a few errors that may negatively impact your FICO score. These errors should be fixed immediately to avoid ruining your financial position. To fix these credit report errors, you need to dispute the report online, review the investigation report from a central credit bureau, and update your credit record. You can also contact the Consumer Financial Protection Bureau (CFPB) if you are not satisfied with the investigation and clean your credit history.

Checking your credit report errors

A credit report is a statement that contains information about personal credit activities and current credit account status. In addition, it displays credit history, credit limits, and how you have been paying your loan. Lenders usually use credit reports to determine if you qualify for a loan or adjust your credit limits.

You can have more than one credit report, especially if you have more credit accounts or when different credit bureaus produce separate reports. A good credit report contains the following information:

  • Your personal information such as names and nicknames you may have used, addresses, date of birth, social security, and phone numbers.
  • Credit information such as historical and current credit accounts, which includes revolving, mortgage and installments, account balance, creditor’s name, payment history, the credit amount.
  • Collection items or public records such as bankruptcies, foreclosures and liens, and inquiries.

When compiling your report, the credit bureau may make mistakes that lead to an inaccurate credit report. To identify these errors, you can visit Credit Sesame or annualcreditreport.com, where you will receive a free credit report once a year. Besides, the Federal Trade Commission showed that about 25% of consumers found errors on their credit reports that could impact credit scores. At the same time, one in five people had these errors fixed after opening a dispute.

It is, therefore, crucial to check for credit report inaccuracies from the three major credit bureaus, including Experian, Transunion, and Equifax. Such inaccuracies may not be widespread, but they are usually due to incomplete information provided by lenders or data furnishers when they occur. These errors may include:

  • Inaccurate personal information like name, address, birth date, and Social Security Number (SSN). Any false personal information may indicate you are a victim of identity theft.
  • Information from a wrong account that does not belong to you may also be attached to your report. This means someone has stolen your identity or opened an account in a similar name.
  • Negative information such as expired debts, late payments, and collection accounts can remain on your credit card for up to seven years. This information should fall off your credit report. If it doesn’t, it means the debt time was reset, which could affect your creditworthiness.
  • The reappearance of damaging information that was once disputed but not fixed. This will force you to discuss the errors with the credit bureaus or the creditors that provided incorrect information.

How to fight credit report errors

Once you realize your credit report has an error, you need to open a dispute and request the credit bureau to correct or delete it. The dispute process may differ from bureau to bureau. However, most bureaus allow you to open disputes online, through emails, or call them directly. Note that your argument may not be resolved through a call; hence sending an email could be the best channel.

Before commencing your dispute process, you need to gather all supporting materials and documents. This will make it easier for the investigator to follow up on your case and give positive results on time. For example, the following documents should be available when trying to fix an error on your credit report:

  • Your national ID or driver’s license.
  • Social Security Number (SSN).
  • A birth certificate or divorce decree.
  • Federal Trade Commission (FTC) copies or police reports if you are reporting identity theft.
  • Your current address and addresses for the past two years.
  • Bank statements.
  • Billing statements.
  • Canceled checks or money stubs showing a paid bill.

Once you have gathered all the required materials, you can now start your dispute process following these steps:

Send a dispute letter to the credit reporting agency

The first step in disputing inaccuracies on your credit report is sending a dispute letter to the credit bureau. According to the CFPB, you should contact the credit reporting agency that produced the report with errors before opening the dispute.

In your letter, remember to give all contact information in writing and explain what the error is and why you think it is wrong. You can still use sample letters found on the CFPB website. Remember to attach all the supporting documentation, such as a copy of an email to verify the status of the credit account with inaccurate information. You should also keep copies of letters or documents that you send. If you are sending it via email, always use a certified email with return receipts.

Contact data furnisher as well

It is also recommended to contact data furnishers as well when disputing credit errors. A data furnisher is a company that provides your credit information to the credit reporting agency. This could be a bank, lender, or credit card issuer. The data furnisher’s address and name can be listed on your credit report. Still, you can contact them directly for an accurate address.

According to Kevin Haney, a credit bureau expert at Growing Family Benefits, you can contact the data furnisher directly to save on time and ask them to correct the mistake. However, if the error is related to identity errors, you should start with the bureau.

Wait for 45 days for investigation and response

The credit bureau has up to 30 days to investigate your dispute and give back the report to you about the status of your credit account. After investigation, the bureaus have 5 days to communicate and update your credit report. However, this period is only applicable if you provide accurate information to support your complaint. In some cases, it can go up to 45 days if you had received a free credit report from annualcreditreport.com or if you submit new materials and documents to support the dispute during the first 30 days of investigation.

Credit bureaus or data furnishers may consider your dispute as “frivolous” if you submit incorrect or incomplete information. They may also stop the investigation if you try to claim that everything on your credit report is wrong without proof.

Review the results and check for updates

If the credit reporting bureau agrees with your dispute, it will send you the results in writing. It will also send you the name and address of the creditor or data furnisher that provided the inaccuracies.

If you agree with the results, you can ask the bureau to update your credit score and delete or correct the mistake. You can also ask them to communicate with all lenders that received a false report within the past six months.

However, suppose you disagree with the report. In that case, you can open another dispute or move to the Consumer Financial Protection Bureau if you are sure the information is incorrect and explain in detail the argument with enough copies of proof. You can follow up the investigation through email or by logging into the website.

The bottom line

By disputing credit report errors professionally, you stand the chance of having those mistakes removed from your credit report. You will also increase your credit limits and lower your interest rates when taking another loan. However, you should know that credit report errors may impact your overall FICOscore if not corrected. Therefore, you should immediately rush to fix them once you notice them.

Rose Rosie is a writer for the personal finance website, Joy Wallet, which provides readers with useful information, resources, and tools to help maximize their financial fitness.

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