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Tuesday, March 5, 2024

How to dispute errors on your credit report

There are several obvious reasons to worry about your credit score, and few reasons why you should ignore them. After all, you need a good credit score and a solid credit history if you ever plan to buy a house or take out a car loan. A bad credit score can even come back to bite you when you want to rent an apartment or apply for certain jobs.

But your score isn’t the only detail you need to pay attention to. You should also keep a close eye your credit report — the document containing your formal credit history, including any outstanding accounts, outstanding balances and payments you have made.

Your report and your score are closely intertwined. If bad information ends up on your credit report due to fraud or misreporting, it can easily cause your credit score to plummet. Likewise, a clear credit report with only real (and positive) information can help your credit score reach greater heights.

That’s why you should get a free copy of your credit report every year from all three credit reporting agencies: Experian, Equifax, and TransUnion. Fortunately, this part is easy to accomplish through AnnualCreditReport.com.

How to dispute information on your credit report

Once you have a copy of your credit report from all three bureaus, you will want to review all the details to make sure they are correct. Inaccurate information you may find in your report may include:

  • Errors regarding your name or personal information
  • Accounts that don’t even belong to you
  • Accounts owned by someone with a name similar to yours
  • Closed accounts reported as open
  • Wrongly reported payment arrears
  • Accounts are mentioned more than once
  • Incorrect balances on accounts
  • Incorrect credit limits on accounts

Thanks to the Fair Credit Reporting Act (FCRA), both the credit bureau and whoever provides them with information are responsible for correcting incorrect information on your credit report. This means that if a specific merchant or bank reports an account that isn’t yours or an incorrect balance, both the credit bureau and the merchant or bank must work together to make things right.

If you discover an error, here are the steps you should take right away:

Notify the credit bureau with the incorrect information about the error

The first step you should take is to inform the credit reporting agency of their error, bearing in mind that not all credit bureaus may have the same information. You must notify them of the error in writing, taking special care to include important details about the error, along with appropriate documentation. The Federal Trade Commission (FTC) even offers a sample letter that you can use if you need help.

Please note that credit bureaus typically have 30 days to investigate your claim and must contact you with a response. They are also required to forward the information you sent them to the provider who initially shared the information with them.

Inform the person who provided the information about the error

You will also want to provide the company reporting the incorrect information with copies of any documentation proving that an error occurred. Be sure to include all information necessary to prove your claim, along with copies of documentation to support you. The FTC offers another sample dispute letter that you can use for this instance.

See if your credit report is updated

Generally, credit reporting agencies are required to notify you in writing of the results of your case. They are also legally required to give you another free copy of your credit report if your dispute has caused a permanent change.

You also have the option to ask the credit bureau to send notices of any corrections to anyone who has requested your credit report in the past six months. You can even have an updated copy sent to anyone who has requested an updated version of your credit report for employment reasons.

Concerns about your credit

While the above steps may sound tedious, it is crucial to understand the damage that incorrect information on your credit report can do. For example, if you incorrectly report late payments on your report, you can do so see your credit score through no fault of your own. And if there are accounts on your credit report that aren’t even yours, that could mean a much bigger problem, like outright identity theft.

Fortunately, the small amount of time it takes to dispute an item on your credit report can really go a long way. After all, any negative information you manage to wipe away should immediately stop dragging down your score.

However, also keep in mind that you can only have false negative information removed from your credit reports. Any damaging information that is true should remain in your report until sufficient time has passed. In general, negative information and reports can remain on your credit report for up to seven years, while bankruptcies can remain on your report for ten years.

Frequently Asked Questions – FAQs

How often should I check my credit report?

It’s recommended to check your credit report annually from all three bureaus.

What should I do if I find errors in my credit report?

Notify the credit bureau and the provider of the incorrect information, providing documentation.

How long do credit reporting agencies have to investigate a dispute?

Generally, credit bureaus have 30 days to investigate and respond to a dispute.

Can I remove true negative information from my credit report?

No, only false negative information can be removed; true negative information remains for a specific period.

What rights do I have under the Fair Credit Reporting Act (FCRA)?

FCRA ensures that both credit bureaus and information providers correct inaccurate information on your credit report.

Are there free services for credit score monitoring?

Yes, services like CreditKarma.com and CreditSesame.com offer free credit score updates and monitoring.

Conclusion

Errors happen all the time and may never be discovered if you don’t find them yourself. In addition to staying on top of your credit reports, it can help to sign up for a free service that gives you updates on new accounts in your name or fluctuations in your credit score. CreditKarma.com and CreditSesame.com are two that offer a similar free service with these features, so they’re both worth checking out.

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