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Your credit score says a lot about your financial health and if you qualify for any loan or mortgage. Therefore, it is crucial to ensure that your credit report is accurate and up-to-date. However, sometimes your credit bureau may make mistakes while updating it, leading to poor credit history. As such, you may be forced to dispute the credit report errors and fix them before it is too late. But, how do you fix them?
To fix errors on your credit report, you need to send a dispute letter to the credit bureau that generated the information and wait for their feedback. Once the bureau responds, review the results and finally check for updates on your credit report. Remember, your dispute may impact your FICO score. Hence you should do it professionally with enough evidence.
Credit report errors dispute process
From the study by the Federal Trade Commission in 2012, about 25% of U.S consumers found errors on their credit reports. Besides, one in five people had their credit report errors corrected by their credit bureau after submitting their dispute letters. This is a clear indication that you should regularly check your credit card to ensure it is up-to-date and correct. However, you should expect a few errors that are likely to affect your financial position in the process.
To ensure your credit card is excellent, follow these main steps. The procedure may be complex to new borrowers, and it is recommended to seek financial advice from experts to reach the pick of your dispute:
Review all three credit reports for errors
The three credit reporting agencies – Experian, Equifax, and Transunion – are responsible for providing information on your credit report. However, you can check for errors in the data by reviewing each piece separately. This is because your lenders may fail to submit your credit information to all the three bureaus, leading to one or two reports being behind time.
Due to the Covid-19 crisis, you are encouraged to check for errors online by visiting AnnualCreditReport.com. You are entitled to a free weekly report through April 20, 2022. You can also get a free credit report through Credit Sesame. Common mistakes you should expect include:
● An error on personal information: Check if your name, address, birth date, and Social Security Number (SSN) are correct. Any inaccurate personal information may indicate identity theft.
● An inaccurate account: You may also find an arrangement that does not belong to you attached to your report. This means someone has stolen your identity or opened an account in your name.
● An expired debt: Such negative information as late payments and collection accounts can remain on your credit card for up to seven years. Often, the 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 negative information: The credit errors that were disputed and solved earlier may reappear on your new credit report. This will force you to discuss the errors with the credit bureaus or the creditors that provided incorrect information.
Gather relevant documents for dispute
Once you identify any error in the report, you need to inform the responsible credit bureau and see if the error can be fixed. However, you cannot submit your complaint without documents to support your claim. As such, to make it easier for an investigator to check and validate your complaint, you need to gather all the relevant documents required for a dispute.
Before opening a dispute, ensure you have the following copies:
● Your driver’s license or government-issued ID.
● 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.
● A canceled check or money stubs showing a paid bill.
Send a dispute letter
You can now send a dispute letter to the relevant credit bureau with all necessary materials at hand. According to the Consumer Financial Protection Bureau (CFPB), you should contact the credit reporting agency that produced the report with errors before opening the dispute. Besides, the three major credit bureaus allow you to send dispute letters through email, online, or by calling them.
You should give all the contact information in writing and explain the error and why you think it is wrong. You can also find sample letters to dispute the errors on the CFPB website. Along with the letter, attach all the supporting documentation, such as a copy of the email to verify the status of the credit account with inaccurate information. You should also keep copies of letters or documents that you send to the credit bureau. If you are sending it via email, you should use a certified email with a return receipt.
Consider checking with data furnisher as well
When disputing credit errors, CFPB recommends contacting the company that provided the credit bureaus with the information. Such a company that provides credit information is called a data furnisher and could be a bank, lender, or credit card issuer. The data furnisher’s address and name can be listed on your credit report. If not, you should contact the company for accurate information.
Moreover, lenders use the information provided by the FICO company to determine your creditworthiness and decide whether to lend money or issue a credit card. This means you should check the entire chain when submitting your dispute and expect positive results. 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
After receiving your dispute, the credit bureau has 30 days to investigate and verify the information with the data furnisher. It also has 5 days after investigation to report back to you. This gives the bureau a total of 35 days to investigate and share its feedback on the dispute. However, in some cases, the investigation may take up to 45 days due to the following circumstances:
● If you had received a free credit report from annualcreditreport.com.
● If you submit new materials and documents to support the dispute during the first 30 days of investigation.
Notably, the credit bureau or data furnisher may term your dispute as “frivolous” if you submit incorrect or incomplete information on the argument. This can also occur if you contest the same item multiple times without any new announcement. Or if you try to claim that everything on your credit report is wrong without proof.
If your dispute is “frivolous,” the credit bureau may stop the investigation and communicate to you within five days explaining why the analysis is stopped. In this case, you can try opening another dispute with updated materials.
Review the results and check for updates
After 30 or 45 days of investigation, the credit bureau will send you the results in writing. If the bureau agrees with the inaccuracies, it will remove or correct the mistake and send you a new copy of your credit report. You can also request it to communicate with other lenders that have received a false statement in the past six months.
If the bureau does not agree with the dispute, it will not remove the item or update the information and send the same report. In this case, you can move to the CFPB if you are sure the info is incorrect and explain in detail the dispute with enough copies of proof. CFPB will investigate the errors, and you can follow up through email or by logging into the website.
The bottom line
Reviewing your credit report at least once a year ensures you maintain a good credit history and win more lenders. In addition, however, you can follow the above steps to clean the mess, avoid common credit errors, and increase your credit limit in case of any credit report errors.
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.
