How to Dispute Credit Report Errors & Win
Table of Contents
- What is a Credit Report?
- How Do I Get My Credit Report?
- When Can I Get Another Copy of My Report?
- Things to Check on Your Credit Report
- How to Dispute a Credit Report
- How Long Does It Take for a Credit Report Dispute to Be Removed from Your Credit Report?
- What if Your Credit Dispute Doesn’t Work?
- What to Avoid When Disputing Your Credit Report
- By David Lukic
- Published: Feb 25, 2021
- Last Updated: Nov 23, 2023
Your credit report is an important piece of the puzzle when you apply for credit cards, a loan, or a mortgage. If there are errors in yours that misrepresent your financial situation, it could result in a denial of credit. More than 2 million people claim their credit reports have serious errors on them. Don’t you think it’s time you find out if yours does and dispute credit report errors?
What is a Credit Report?
There are three big companies (Equifax, TransUnion, and Experian) that collect information about each American consumer. A typical credit report contains your name, address, social security number, date of birth, and your credit history for the past ten years. A credit report indicates how well you pay your bills and if you ever filed for bankruptcy.
The credit reporting agencies use this information to calculate your credit score, which indicates your creditworthiness. Lenders, insurance companies, landlords, and others purchase credit reports on you before deciding whether or not to lend you credit or supply you with a lease, insurance, or employment.
Credit reports are governed by the Fair Credit Reporting Act (FCRA), and the Federal Trade Commission (FTC) oversees these credit bureaus and enforces the laws laid out in the FCRA.
How Do I Get My Credit Report?
You are entitled by law to a free copy of your credit report each year. You should request one from all three credit bureaus as they get their information from different sources and calculate scores differently.
You will want to check them carefully for any inaccuracies and have those corrected right away.
There are three ways to get a copy of your credit report. Going through the process online at AnnualCreditReport.com will usually let you access your information immediately, but you can call the site's dedicated number (877-322-8228) for more specific questions.
Another option is to print the credit report request form and mail it to the following:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
It may be tempting to check all three reports at the same time, but if there's no immediate concern, then it's best to stagger the requests. Since you're entitled to a free copy from each agency, checking a different one every few months will help you avoid additional fees, as extra copies can cost up to $14.50.
When Can I Get Another Copy of My Report?
You're eligible for a free report every 12 months, but you may be able to check your reports online at no extra charge. Additional free reports are available in the following cases:
You Were Denied an Opportunity Based on the Report: If a negative aspect of your credit report caused your application rejection, you could request another free report. You must provide proof that the report directly caused your lost opportunity and submit the request within 60 days of obtaining said proof.
Instances of Identity Theft or Fraud: People with reasonable suspicion of fraud are eligible for additional free reports as they're at higher risk for inaccuracies. Information in the report can also help them better understand the scope of the fraudulent damages.
Starting a Job Hunt: If you intend to search for a job within the next 60 days, then you may request extra credit reports. The information assists applicants in understanding their needs and qualifications during the search.
Many third-party sites claim to get you free credit reports. Be wary of these services, and make sure to do your research on them before signing up. Giving them your personal information (SSN, Name, Contact Information, etc.) feels natural, but it may be a cover for a malicious phishing scam.
Things to Check on Your Credit Report
You must know what problems to look for to win your credit report dispute. It'll help you collect the relevant proof the agency will need, and can vastly expedite the process. Apart from the basic identifying information, your credit report will include the following:
"Hard" and "Soft" Inquiries: Reporting agencies log every time your credit report gets checked. Soft inquiries are typically harmless and don't require your attention. They include self-checking reports and unsolicited credit offers.
Hard inquiries result from a legitimate review by a lender. These inquiries show how many credit-based applications you've made and could flag you as a high-risk individual if there are too many. Look through your hard inquiries and ensure they were all done by you.
Open AND Closed Credit Accounts: Each bureau regularly gets reports from loan providers. While closed accounts don’t get updated, they do stay on your report for seven years. This is in case it's needed in a lawsuit or investigation.
You'll want to review these account’s information with a fine-toothed comb since a single mistake can damage your credit. The report will list your accounts' credit limits, used amounts, payment history, and open dates.
Collection Amounts: Any debt turned over to collection agencies will stay on your credit report for up to seven years. This includes outstanding amounts from landlords, doctor's offices, and even utility companies. It's common for individuals not to know that their debt was passed into collections. Make sure to confirm the mistake before filing a dispute.
Bankruptcies: Personal bankruptcy can immediately disqualify you from many lending opportunities. This information stays on credit reports for up to 10 years. It's doubtful that you'll have a mistaken bankruptcy claim against you.
Childs and Spousal Support: Missing family aid payments can stay on your report for seven years. The longer the amount remains unpaid, the more harmful it'll appear to creditors. The difficulty in disputing these payments ranges wildly based on your former spouse's willingness to help.
How to Dispute a Credit Report
If you find errors on your credit report, you need to take action and dispute credit report errors quickly because correcting it may take time. Follow the steps below:
- Get a copy of your credit report for each agency. Look for outdated information, such as loans that were paid off or old home addresses. Check to be sure your birth date and social security number are also correct.
- Call the lender or creditor directly to see if their records show the same error. If they can resolve it with that phone call, they will update the credit reporting agency.
- Gather together the evidence to prove your claim. You may have to obtain copies of canceled checks or other proof that you paid off the debt. You must do this in writing. The FTC offers a sample dispute letter you can use as a template.
- Send your letter and copies of proof (not originals) to the credit reporting agency either online or through the mail. If you send by mail, use certified mail with a “return receipt requested.” This will ensure you have proof they received your dispute letter.
How Long Does It Take for a Credit Report Dispute to Be Removed from Your Credit Report?
Once they receive your credit report dispute letter, the credit reporting agencies have to initiate an investigation within 30 days. They are required by law to contact the lender who provided the erroneous information and notify you in writing of the result. If the error is found to be valid, the credit bureau you contacted must let the other two agencies know so they can correct their errors as well.
How long your dispute lasts will vary on what you think is wrong and who made a mistake. The credit bureau needs to receive your dispute, contact the information furnisher, and wait for the furnisher’s investigation. That final step can be a death sentence.
Issues arising from clerical errors like misspelled names, addresses, or identification are handled efficiently. If you’ve kept copies of the paperwork in question and can prove the issue yourself, then the problem may be solved in as little as a few days.
If your dispute involves an erroneous payment, then expect the process to take significantly longer. Credit bureaus must inform the third-party responsible for the error within five days. This gives businesses and creditors enough time to complete their investigation within thirty days.
Each major reporting agency will remove a disputed item if the third-party furnisher doesn’t respond within the allotted time.
After the investigation is complete, the credit reporting agencies must, upon your request, send a corrected copy to anyone who requested your credit report in the past six months and two years for employment. If you were denied a job because of the errors in your credit report, this might help fix it. Hence, in this case, credit report disputes could play a crucial role in your future.
Even after the credit reporting agency amends your credit report, it is a good idea to follow up with the lender to make sure their records are now correct as well. If they refuse to change them, ask that a copy of your credit report dispute letter be stored with the files.
What if Your Credit Dispute Doesn’t Work?
Sometimes, nothing changes after a dispute, but that doesn’t mean it’s over. A few options are open to you if you disagree with the results.
If you haven’t already, then contact the lender directly. You may be able to provide more clarity and direction than they had during their investigation. Come prepared with specific dates, payment amounts, and transaction ID numbers to help the process along. You don’t want to be on the phone all day.
You could also file a new dispute. We recommend filing with a different bureau and preparing additional information if you take this option. Resubmitting old documents rarely changes anything.
Your other choice won’t correct the report, but it may mitigate the damage of erroneous information. Adding a statement of dispute to your credit report shows potential lenders, landlords, and employers that something went wrong. This can sometimes give you a chance to explain the problem and avoid immediate rejection.
What to Avoid When Disputing Your Credit Report
A blemish on your credit report can stay there for up to ten years. If that negative information is incorrect, you have the right to dispute it and have it removed. However, many people make serious blunders when attempting to correct errors, which cost them the right to a clean credit report.
Dispute the Error Only with the Furnisher
If you contact only the furnisher, you may not be able to get the error corrected with the credit bureau later. You must follow the proper credit reporting agency dispute procedure so that you are covered later. It is not a crime for credit reporting agencies to report inaccurate information; it becomes a crime only if they fail to initiate an investigation upon receiving a credit report dispute letter. You cannot sue the furnisher or credit bureau unless you follow the correct process.
You No Longer Have the Evidence
This is a big problem. If you paid off a loan or paid it on time and the lender and credit bureau show it as unpaid or in collection, you must have the documentation to back up your claim. If you lost the evidence, your letter of a dispute of credit report will be in vain. Part of that evidence is the proof (certified mail receipt) that you sent your dispute letter to the credit bureau, and they received it. In a legal battle, you won’t get past the initial hearing without evidence. If you have been denied credit because of the errors, have that put in writing, so you have something to show that this error caused you harm.
Too Little Information to Dispute a Credit Report Error
The more information, the better. If you simply call the credit reporting agency and don’t offer up enough details, you may have already lost the battle. Credit bureaus prefer these quick phone calls because then they can summarize your dispute as frivolous, and they won’t be required to open an investigation. Do not give the credit reporting agency the ammunition to say, “You didn’t provide enough information.” Send them every piece of documentation you have related to your issue when filing your dispute. It’s better to do everything in writing rather than by phone call.
You Worked with a Debt Collector and Re-Aged Your Debt
If you work with any debt collection service, often, your debt will be re-aged to the new payment terms. The effect this has is that now a bad debt can stay on your credit report for longer than ten years, and this is a hard one to dispute. The FCRA does allow you to fight it, but you have to provide original documentation to show the actual date of the loan.
You have the right to a clean credit report. If you follow the steps outlined in this article, you can challenge any errors and get them resolved expediently.
