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Credit reports and scores can play a crucial role in your financial life, a fact that’s evident when you need to apply for an auto loan or mortgage. It can be frustrating to get less-than-great terms, and infuriating if you find out you’re being offered a higher interest rate than you expected due to an error on your credit report.
As the basis for your credit scores, you want to make sure your credit reports don’t contain any errors. Unfortunately, the big three credit bureaus (Equifax, Experian and TransUnion) often have no way of knowing if information is wrong — unless you alert them.
To detect errors and avoid any unpleasant surprises, it’s wise to actively review your credit reports and dispute mistakes.
- What is a credit report?
- Types of credit report errors
- How to dispute a credit report error
- How to protect your credit
- The bottom line
What is a credit report?
A credit report reflects your history with different types of accounts, including credit cards and loans, as well as any judgments for nonpayment, such as bankruptcies and collection activity. Your name (and variations of your name), address (as well as previous addresses), Social Security number and any lender inquiries are also included. The three major national credit bureaus — Equifax, Experian and TransUnion — collect and store this information on more than 200 million consumers.
While the credit bureaus are private companies, government regulations help protect your information and limit who can access your credit reports.
The Fair Credit Reporting Act (FCRA) is the main federal law related to credit reporting. It gives you the right to review your credit reports, governs when negative information must be removed from your reports and ensures the right to file a dispute with the credit bureau if you find inaccurate information. The credit bureau must investigate your claim, generally within 30 days, and either verify, correct or delete the item you’re disputing.
You can view your credit reports for free once a year from each credit bureau at annualcreditreport.com or by calling 877-322-8228. You can pull all three reports at once or space them out over a year. Plus, through April 2021, the site is allowing consumers to request a free copy every week.
If you’ve been denied credit, you are also entitled to a free copy as long as you make the request within the last 60 days of receiving notification.
If you think you’ve been a victim of fraud, you can also request additional free credit reports. Know that Equifax, Experian and TransUnion also offer free credit reports, but may bundle your request with credit monitoring or other services for a fee.
Types of credit report errors
Your credit report is broken into different sections, and different types of errors can appear in each section. Some of these, such as an incorrect late payment, can have a significant impact on your credit scores. Others, such as a wrong address, might not affect your credit scores, but can still be important to look for and fix.
Errors can result from misreported information, fraud and other mistakes from data furnishers (the companies that send information to credit bureaus, such as lenders and credit card issuers) reporting to the credit bureaus. And, because the credit bureaus generally don’t share information with one another, you’ll want to check your credit reports separately for errors.
Here are some common credit report errors:
- Identity errors: Such as an incorrect name or address.
- An incorrect account status: Including an account being reported as open, closed or past due when it isn’t.
- Incorrect balances: The wrong balance owed, past due or the wrong payment amount.
- Accounts you don’t recognize: This may be an indication that an account was fraudulently opened in your name.
- Untimely negative marks: This could be a late payment that’s more than seven years old, for example.
With FCRA protections, you can challenge even small misrepresentations of your credit history and ask the bureaus to clean up your report.
While you can try to dispute legitimate negative notations, such as a late payment that was truly late, the odds are that the lender who reported that will be able to prove to the credit bureau you were in arrears and your efforts to get that removed will be denied.
How to dispute a credit report error
There are three ways to dispute any error you find on your credit reports: by mail, phone or online. Here are a few steps you can follow, and what to expect after you send the credit bureau your dispute.
Step 1: Verify that the error is legitimate
Before you dispute something as incorrect, make sure there’s actually an error to dispute. At times, this may be more complicated than you think.
For instance, you may not recognize the name that a company is using to report your account to the bureaus (tip: do a quick Google search of the name before you proceed). Or, if you’ve had an account sent to collections, you may notice the balance is higher than what you originally owed. That could be due to interest and fees being added rather than an error.
Step 2: Try to correct inaccurate information with the data furnisher
For example, if your credit card company is listing a late payment that you know was on time, then contact the issuer to see if you can get them to supply the correct information to the credit bureau. Or, if you closed an account and it is still being reported as open, then call the company and ask them to report the account as closed. A quick phone call can often clear up simple mistakes, but if the data furnisher is not cooperating, then proceed to the next step.
However, if the error is serious enough to severely impact your ability to qualify for a mortgage loan, for example, you may want to start by disputing with the credit bureaus; federal law only gives you the right to collect damages if your credit reports aren’t corrected once you’ve sent a dispute to the bureau.
Step 3: Gather supporting documents
You may want to gather supporting evidence to back up your claim that information on your credit report is incorrect. Depending on the type of error you’re disputing, this may include bank statements, canceled checks, proof of address or copies of correspondence with the creditor. You can mail copies of the documents, or add them as attachments if you file a dispute online.
Step 4: Send the dispute to the credit bureaus
Once you’re ready, you can submit your dispute to the credit bureau. The Federal Trade Commission (FTC) has a sample letter you can use as a template if you want to mail your dispute. While the credit bureaus allow you to dispute an error online, some experts recommend mailing it in for best results and to create a paper trail in case you run into problems.
If you do choose to mail in your dispute, send the letter via certified mail with return receipt requested. This ensures there’s a paper trail proving you initiated a dispute and that the letter was received.
|Credit bureau||Dispute website||Dispute form and address||Phone number|
|Equifax||Dispute website||Dispute Form |
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30348
|Experian||Dispute website||Dispute Form |
P.O. Box 4500
Allen, TX 75013
|TransUnion||Dispute website||Dispute Form |
Consumer Dispute Center
P.O. Box 2000
Chester, PA 19016
Step 5: Wait for a response
Once the credit bureau receives your dispute, it generally has 30 days to investigate your claim and send you a response. (The bureau may have 45 days if you file your dispute after getting your credit report from annualcreditreport.com, or if you send additional supporting documents during the initial 30-day period.) During the investigation time, the bureau may reach out to the company that sent the information to verify your claim.
Step 6: Review the resolution of the dispute
After finishing its investigation, the credit bureau has five business days to send you the results. It may conclude that the information was verified and incorrect, update your credit report with corrected information or delete the information altogether.
Once the credit bureau that receives the dispute finds the error legitimate after forwarding your dispute to the information provider, the data furnisher or lender must also notify the other two credit bureaus so your information is updated.
If you don’t agree with the result of the dispute, you could file another dispute with additional supporting evidence. You could also add a statement to your credit report stating that you think there’s an error, but that statement doesn’t impact your credit scores.
When you’re certain there’s been a mistake, but the credit bureaus refuse to correct an error after you’ve submitted disputes, you may also want to contact a consumer rights attorney who specializes in FCRA cases. Some consumers have successfully had their credit reports corrected after filing a lawsuit, and even won money from creditors or credit bureaus.
How to protect your credit
You can protect your credit by regularly monitoring your credit reports for errors and disputing them with all three credit bureaus. Additionally, you can freeze your credit reports to lessen the chances that someone can fraudulently apply for credit in your name.
Keep tabs on your credit score
Monitoring your credit score can also alert you to changes in your credit reports. For example, if your credit score makes a dramatic drop and you’ve done nothing to cause that, such as making a late payment, then it would behoove you to check your credit reports to see if anything is amiss.
Make checking your credit report a routine
Again, you can request a free copy of your credit report from each of the credit bureaus on annualcreditreport.com at least once every 12 months. Take advantage of that service by making it a point to pull one of your credit reports from each bureau every four months. Go over the report thoroughly to make sure that everything looks in order.
Use a credit monitoring service
Credit monitoring services can also be helpful as they’ll automatically send you an alert when there are major changes in your credit reports. These could help you quickly find out if a negative mark was added to your credit report — a late payment, or when a new account was opened. There are free options available, including services for Capital One and Discover customers.
Freeze your credit reports
You can freeze all three of your credit reports to restrict others from accessing your credit history or opening new accounts in your name. Once your reports are frozen, only you can unfreeze or temporarily “thaw” them when you want to apply for credit.
The bottom line
Your credit reports contain vital, key information that plays an important role in your financial life. The information within them helps future lenders determine your creditworthiness for loans, credit cards and other services. While we trust that companies we do business with report only accurate information, mistakes do happen.
Regularly checking your credit reports for errors and sending disputes can help keep erroneous negative marks from hurting your credit. Monitoring your credit reports and scores regularly can also alert you to fraudulent activity, allowing you to stop a thief before too much damage is done.